What are the differences between equity crowdfunding and debt crowdfunding?
Equity crowdfunding involves raising capital by selling shares of a company, while debt crowdfunding involves borrowing money that must be repaid with interest.
Which one is better for startups?
It depends on the startup's goals. Equity crowdfunding can provide capital without immediate repayment, but it dilutes ownership. Debt crowdfunding allows for retaining full ownership but requires regular repayments.
What are the risks associated with each type?
Equity crowdfunding risks include loss of control and potential failure to attract investors. Debt crowdfunding risks involve the obligation to repay regardless of business performance.
Can you give examples of platforms for each type?
Sure! Popular equity crowdfunding platforms include SeedInvest and Crowdcube, while for debt crowdfunding, you might consider LendingClub and Funding Circle.
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