Crowdfunding

[eressie2]

How does crowdfunding work? Is it legal?

[firebyfifty]

Yes and no.

 

There are legitimate crowdfunding platforms that allow crowdfunding for legitimate reasons.

 

However, you haven't and won't see these platforms advertised in traffic exchanges or safe lists. The platforms advertised in online marketing circles as 'crowdfunding' are cash gifting schemes and in many States will be illegal.

 

Legitimate crowd funding will often includes platforms such as 'kickstarter' where people can fund / give cash to a person or company with an idea - they use the money to develop the product and often the people who helped fund the product will get a discount or free product once developed.

 

Other examples of legitimate platforms are the ones you see where people are crowd funding to help with the aftermath of tragedy such as funeral expenses (you even get some idiots request crowdfunding to fund their holidays or motor bikes etc but obviously they don't do as well).

 

If you have to give money to someone else (i.e: help crowdfund someone else's goal) it is unlikely to be legitimate.

 

You should not have to give money (crowdfund) any form of upline on a legitimate crowdfunding platform - at most, the platform will charge a fee. But you should never ever need to fund an upline of any form if it is legitimate.

 

Platforms that offer a means to ask other people for money so that they can use the same website to ask other people for money and so on and so forth is not legitimate in most States around the world.

 

I am not a lawyer and I am not calling out any specific programs for being illegal as I don't have the time or energy to research them enough so if a crowdfunding 'mlm' style platform is a fit for your business, go for your life, just start thinking of a cover story for the tax man!

 

Hope this helps.

 

Nate

[weblord]

i think it's all in the favor of the owner themselves and not for us.

[beyah]

Think you for your insight on crowdfunding. It is such a thin line in crowdfunding that I need to understand. I see so many systems that are legitimate that look so much like the illegal system. Most are the cash gifting systems. So are you saying that you can send money on platforms like kickstart and gofundme but not person to person?

[Rewll]

I checked legal websites and that's what I found: The Securities and Exchange Commission (SEC) regulates the selling of securities to the public as an investment, and it is illegal to obtain a payback on an investment unless the company has been approved by the SEC. In 2012, the Jumpstart Our Business Startups (JOBS) Act became law, and one of the key provisions was to instruct the SEC to find ways to exempt crowdfunding from some of the more onerous provisions that restrict access to funds from non-registered securities offerings by non-accredited investors. But companies like RockThePost.com claim they can offer securities to accredited investors.

[Andrew Berg]

Crowdfunding is a great way to get support or funding for a project or venture. It involves soliciting small amounts of money from a large group of people to finance the project. This type of fundraising typically takes place online, making it easy and accessible to anyone with an idea.