What are the advantages of crowdfunding financing model compared with traditional financing?

The crowdfunding financing model has the following advantages compared with traditional financing.

1. It can reduce the cost of financing and effectively promote micro-entrepreneurship. Micro-entrepreneurship refers to entrepreneurial activities that use micro-platforms or network platforms as important carriers to develop creative ideas in subtle fields at a small cost.

Its main features are that it can be copied in batches, the investment is small, and the benefits are generated quickly.

Micro-entrepreneurship is one of the effective ways to alleviate the current employment pressure of college students in my country.

However, under the current background of financial control, problems such as poor private financing channels and high financing costs have hindered the development of micro-entrepreneurship. Crowdfunding is a more popular financing method, which provides micro-entrepreneurs with lower acquisition costs.

The possibility of lower and faster funding can well solve the problem of difficult financing.

The project sponsors use the crowdfunding platform to pool the public's tiny funds to obtain funds for a certain entrepreneurial activity, breaking through the constraints of the traditional financing model. Each investor can also participate in the planning, consulting, management and operation of the project.

Due to the open nature of the Internet, investors are not restricted by region, occupation, age, etc., as long as they have certain financial capabilities, management experience and professional skills.

This kind of micro-entrepreneurship activity relying on crowdfunding platforms not only realizes the crowdfunding concept of crowdfunding, brainstorming, and risk-taking, but also accumulates experience and connections.

2. It can stimulate grassroots innovation and shorten the distance between producers and consumers. The crowdfunding model is not only an investment and financing activity, but also serves as an innovation model to stimulate grassroots innovation.

The technical characteristics of the Internet and the process of business democratization determine the arrival of an era of grassroots innovation. Everyone can exert their own innovation and research and development capabilities, and use social resources to turn their ideas into realistic products.

The crowdfunding model provides every grassroots innovator with a platform to obtain important resources such as funds, markets, and connections. Different investors, because they have different professional backgrounds and different values, can directly put forward their own views and opinions on the project.

, the project sponsor will carefully evaluate this and further improve the plan.

The interaction between the two parties has shortened the distance between producers and consumers. This behavior that focuses on user communication and experience is similar to mass customization, which greatly reduces the market risk of products.