You are full of great ideas. You never get to implement many of them. You don’t have enough money. Hang on, there’s a solution–crowdfunding. Crowdfunding offers a modern way to launch and finance new businesses. You only need a campaign, an idea, and a platform to get started.
For those who are unfamiliar with crowdfunding, it may seem daunting. It’s really simple. You just have to convince people to fund your project via the internet.
A will (also known as a testament or last will) is a legal document which states your wishes for the distribution of your assets after you pass away.
You can also use it to designate a guardian for minor children. A will is a common and important estate planning tool.
In a will, you appoint a personal representative (also called an executor) to carry out your wishes, and to distribute your property to the heirs.
Four simple steps are all it takes:
- Research
Do your research before you apply for funding. You must know your target market, your audience and your funding requirements. Only then can you create a business plan or a financing strategy.
- Select audience
Choose your audience. Knowing your market and appealing to them directly makes things easier. You could target the consumer who will buy the product or service you are selling. You can also target those groups of the population that are most likely to support your initiative. Imagine you’re a new startup for women’s rights. You’ll need to target specific groups of people based on their gender, class, and political views.
- Select platform
You will now need to choose the platform that best suits your needs. You will need a platform which allows you to reach a larger audience and also supports your funding plan. Make sure the platform you choose is user-friendly and efficient.
- Offer incentives
You can’t ask for money from people. You must give people an incentive or motivator. You can use t-shirts, contests or shout-outs on social media. This strategy is often used by social media influencers to promote crowdfunding. They use the opportunity to fundraise for their brand. This creates brand loyalty and stirs up interest among the crowd.
This might all seem a bit complicated. You may not want to depend on strangers in order to achieve your dreams. You may prefer to use traditional capital financing methods, such as loans. You may not be tech-savvy, and prefer to use traditional methods of capital funding.
After your death, it is up to your personal representative to complete the probate procedure and settle your estate.
A trust is like a will but offers more protection for your beneficiaries
A trust is an important legal document which allows you to pass assets privately to your beneficiaries and avoid the probate process. The biggest difference between a trust and a will is this. Your family can inherit your assets in private if you use a trust.
This could be a big mistake. Crowdfunding is a great way to raise capital quickly. No additional burdens such as interest and loans are added to a business. The platforms used for crowdfunding are often easy to use and do not require much technical expertise.
Crowdfunding has many other advantages, including:
Reach out to more people
You can access many markets, and you have many opportunities to invest. You can raise money from strangers as well as from professionals. You can quickly and easily get the money you need. You can also see how popular and large your market will be.
Organization
You can still get a good business plan even if you don’t get any funding. The business plan and funding proposal can be used to reach out to investors via other media. You will, in any case have a solid business strategy to guide your future operations. This can be a great way to organize your business.
Awareness
Crowdfunding is a great tool to get people talking. This increases brand awareness and traffic to your website and social media sites. You can reach out to potential customers, and even sell your very first product.
This sounds great, doesn’t it?
How do you crowdfund? You can do it in three different ways:
Donation-based crowdfunding
It is a crowd-funding opportunity that does not require investors to be compensated financially. Donations will be what you receive when contributions are received. This strategy is ideal for small businesses who can’t afford to be tied down by repayment schedules.
The probate process is long and can be costly. This will save them both time and money.
You are the trust grantor when you create a new trust. Transferring ownership to the trust is also called funding. You can also name yourself trustee for the assets of the trust.
You can manage your assets just as you do today. The key to avoiding probate court is to place your assets under the trust’s ownership.
If you have a will, your family must go to probate court in order to get your assets.
Your assets will be made public since the probate process is public. It is not uncommon for your family members to have to pay additional costs to receive an inheritance because of the court and lawyer fees associated with probate.
Reward-based crowdfunding
You can also use this technique to raise money for businesses, brands and individuals. You will have to reward your contributors somehow, as the name implies. Many campaigns pre-sell a new product at a discount, and then deliver it to the backer a few month later.
Living Trusts have advantages over Wills
Living trusts are used to avoid probate
Trusts can offer additional protection to your beneficiaries
The size of your estate will determine whether a living trust can reduce your estate tax.
* A trust is a way to manage assets for minor beneficiaries, until they reach the age where they can receive their inheritance.
A will and a trust differ in that the will only comes into force after the creator’s death, while a living trust takes effect immediately upon signing.
The person who executes the trust is called your successor trustee. Executors or personal representatives are the people who carry out your will.
Although they both serve the same purpose, there are slight differences in their responsibilities due to the fact a will has to go through probate for your estate before it can be settled.
* Equity-based Crowdfunding
This technique is different than the other two. Your investors or contributors will have a stake in your business. The investors will exchange capital for equity and become part owners. The return on their investment will be similar to a traditional dividend.