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What are the Types of Crowdfunding in India?

    What are the Types of Crowdfunding in India

    For many decades, entrepreneurs relied on family members and friends to help raise money for their dream ventures. Individuals turned to their social networks and connections to raise funds to pay for their loved one’s expensive medical treatments. However, crowdfunding platforms’ like Ketto have allowed India’s generous and enterprising hearts to accumulate these finances quickly.

    At its roots, crowdfunding is a mode of raising money from multiple individuals towards a single cause. However, crowdfunding today has a new dimension. It is now primarily done online through websites that host your fundraiser.

    Depending on your needs and goals, you can run three different types of crowdfunding campaigns in India. The Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI)regulates crowdfunding campaigns and the websites that host these campaigns.

    Let’s take a look at three types of crowdfunding that are legal in India:

    Donation-based Crowdfunding

    Head to any crowdfunding platform such as Ketto, and you will see donation-based crowdfunding exceedingly popular and effective. Do you want to raise money to help marginalised kids have a better education? Does your heart bleed for the stray dogs in your area, and you want to build an animal care shelter for them? Irrespective of the cause that you hold dear to your heart, you will indeed find several like-minded people willing to make contributions and support you in the world of donation-based crowdfunding.

    A donation-based crowdfunding campaign involves identifying the target amount, choosing the most suitable crowdfunding platform, writing a powerful story about your cause, and sharing the campaign far and wide.

    Here, the only thing the donor is looking for is the satisfaction of knowing that they have helped someone.

    Rewards-based Crowdfunding

    Rewards-based funding is also known as seed funding because entrepreneurs are looking at crowdfunding to bear their ventures initial costs. The entrepreneur pledges to provide some gratification in return for monetary contributions to the fundraiser.

    Often, the kind of reward offered will be predetermined based on the donation made- for example, a start-up that makes educational apps may provide 3-month free access to investors who donated between INR 5,000-10,000 or offer 6-month free access to those who give INR 10,000-20,000.

    Rewards-based crowdfunding acts as a great promotional strategy as the investors themselves become spokespeople for the enterprise’s offerings. A complete win-win! The process of starting a rewards-based crowdfunding campaign involves identifying the goal amount, choosing a suitable crowdfunding platform, deciding on the rewards, building an appealing story, and sharing the campaign.

    Debt-based Crowdfunding

    Also known as marketplace lending, peer-to-peer lending, or crowdlending. Debt-based crowdfunding is fast becoming an alternative to conventional borrowing mediums. Multiple lenders contribute some amount to help the borrower reach their target amount, in exchange for a predetermined interest.

    Crowdfunding is a brilliant way to allow others to be a part of your dreams and goals. So, take your time and choose the type of crowdfunding that best serves your purpose, and start thriving. You can visit to find a wide range of fundraising campaigns, and you can donate to any cause of your choice and make a difference in someone’s life.

    Sushant Peshkar
    Need Funds for Medical Treatment?

    Start a Fundraiser on Ketto and raise the amount for your treatment