Crowdfunding has a number of different forms, as follows:
Rewards: The investor receives an award from the company raising money. For example, if a company was raising €100,000 to develop a new watch they could offer investors who commit a minimum of €500 a free watch when it is produced. However, the investor receives no shareholding in the company.
Equity: The investor receives shares in the company. The more he invests the more shares he receives. For example, if a company was raising €100,000 in return for 20% of the company an investor who invested €1,000 would receive or own 0.2% of the company.
Donation: The investor contributes to a good cause but receives no shares in a company or a reward from a project. For example, if the parents of a sick child needed to raise €200,000 to fund a vital operation they could do so using a donation based platform.
Lending: Strictly speaking, this is not called crowdfunding and is more accurately known as Crowdlending or peer to peer lending. Individuals lend money to companies or individuals and receive interest on the money they lend. For example, an entrepreneur wants to borrow €50,000 to buy an Ice Cream Van. He would pay interest on this €50,000 and would also have to repay the €50,000 to the lenders. The lenders would get no shares in the Ice Cream van.
Here are the websites in Ireland which offer a crowdfunding service and the type of crowdfunding they offer:
iCrowdfund (https://www.icrowdfund.ie/) offers Reward and Equity based crowdfunding. The company is located in Tuam, Co Galway.
Fund it (http://fundit.ie/browse/) is a Rewards based crowdfunding website which specialises in funding creative projects. It is based on Kildare Street, Dublin 2.
CoFunder (https://www.cofunder.ie/) is a crowdlending website based on Fitzwilliam Street, Dublin 2.
LinkedFinance (https://www.linkedfinance.com/) is Ireland’s largest peer-to-peer lending website. It is based on Liffey Street, Dublin 1.
Be cure to let us know if we have missed anyone!