How Crowdfunding Works in Ukraine

by Roman Cheplyk
Friday, December 31, 2021
How Crowdfunding Works in Ukraine

The Ukrainian brand "Enjoy The Wood" raised $817 thousand on the "Kickstarter" platform

Kickstarter — an American public-benefit corporation based in Brooklyn, New York, that maintains a global crowdfunding platform focused on creativity.

Crowdfunding is a way to find the money for any project: startup, event, charity, and so on.

The people who fund the project in crowdfunding are called donors or backers, and the host is named recipients or founders. The project for which money is collected is called a startup.

Donors can invest in projects free of charge or expect some benefit. Many investors want to be involved in something tremendous or valuable. Therefore, they are looking for options for investment in unique projects. Others wish to receive dividends. Some want to help just like that.

Therefore, the principle of crowdfunding is simple: we create an idea and tell people about it who might be interested. They just want the project to take place. Most often, crowdfunding platforms are used for these purposes.

In crowdfunding, you can donate money or get something in return. Further, it can be divided into types:

  • Crowdfunding of shares. Companies raise money through the sale of a stake in the project;
  • Raising debt capital. Donors of the project invest money to receive it later with interest. In structure, such crowdfunding resembles peer-to-peer. It is also called debt crowdfunding;
  • Reward contributions. Participants receive gifts for their contributions. 

Europe and America are more willing to give money to startups related to medicine, robotics, and biotechnology. In the countries of the former CIS, most of the money is collected by crowdfunding projects from the field of cinema, music, or books.

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