Impact Guru: Crowd funding for your need

Are you one of the following in the need of money: NGO raising funds for its operation, an individual trying to figure out the medical expenses, or a startup looking to raise capital, Impact Guru is there to help.

Isn’t it amazing if one could pitch a company’s idea to a pool of investors via online and raise capital for startup without meeting in person? Wouldn’t it be nice if there was a platform that could enable this, and connect more investors and people starting business? – Impact Guru in India is innovating to create an online crowdfunding platform to help individuals, non-profits, social enterprises, and corporates to raise money online for social or personal projects.

Impact guru creates value by helping people get access to funds by advertising the need through their platform. It also creates value for the crowd participants (fund givers) as they could give their money for the cause they believe in or by investing in an interesting idea. Impact Guru captures value by fixing a one-time payment of $50 for users who promote their need using Impact Guru’s platform.

How they incentivize participation and manage the crowd?

Reward-based –

Here, a funder gets a reward in return for his generous contribution. It could vary from tickets for music/theatre fests to tech gadgets. This type of reward works best for creative projects and tech start-ups.

Donation-based –  

In case the money is given to an institution that is registered with Indian government under the section 80G of the income tax act, one can claim the tax deduction of 50% to 100% of the amount given to certain funds and charitable institutions.

Equity-based –

In this equation, when one funds a startup, he/she gets a stake in the company. The payments are usually exchanged offline, and the model is yet to gain traction in India.

Debt-based –

This works like a loan where one earn an interest on the contribution he has made. This model is similar to microfinance for social or rural ventures.

Growth potential of this business

According to Impact Guru, only $4 million is raised through the crowdfunding model compared to $5 billion by venture-capital backed investment in technology companies in 2016. For now, there is so much uncertainty in regulation in this business model. Also, many competitors in this space also do not possess nodal accounts. All this features are yet to be improved.

References –

  1. https://techcrunch.com/2012/12/08/asias-secret-crowdsourcing-boom/
  2. http://www.livemint.com/Money/5bE8OqmsgBjCQADgs50LrJ/Get-the-crowd-and-its-money-behind-you.html
  3. http://crowdsourcingweek.com/blog/indias-top-ten-crowdfunding-platforms/

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2 thoughts on “Impact Guru: Crowd funding for your need

  1. Interesting post. Curious to know which of the incentive structures are most popular. The rewards-based approach seems a bit perverse in that maybe we should be donating purely out of the goodness of our hearts, but I could see people gravitating toward that option.

  2. That’s a really good observation, Amy. At present, most of the transactions happen for social causes which adopts donation-based model. Yes, rewards-based model looks very shallow as there is no motivation for crowd funder to give his money to the project as there is no incentive. To scale-up, Impact guru has to innovate more to incentivize crowd funders. For example: there is so much one could improve in the debt/loan based model where trust factor between donors and businesses is still a problem.

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