Public funding is a very old and an effective way of boosting capital in startup. It is effective mostly because of its dual purpose of acquiring funds and being an effective marketing platform.

Public funding is one of the ways of harvesting funds for startups or established companies. Also called as Crowdfunding, this process has witnessed growth exponentially in the recent times, especially with large scale public funding projects like the Ubuntu Edge for a smartphone by Canonical Ltd.

Crowd funding essentially entails gathering capital from a large number of people to whom the idea appeals, be it an actual crowd or on-line sources. In fact, a lot of the crowd funding rounds is organized online. Numerous web platforms have come up over the years that allow would-be-companies to connect with those seeking to lend capital. (You may have heard of Kickstarter , but that is not the only one) A number of them involve long processes and the entrepreneur has to go through a series of rounds before funds are actually granted to him.

So, why is it good?

A lot of people opt for crowd funding platforms, because with garnering investments- it also serves as an efficient medium for marketing. One’s product is assessed and analysed by an audience directly.

An audience, web audience that scrutinizes the product/services and decides whether or not it is suitable for investing.  Besides, it also saves the company’s time and money on creating marketing and publicity strategies.

It is a process that first allows one to understand and analyze the market completely before making investments, so there is not so much of a risk involved either. It is a non-traditional manner of garnering funds that is gaining momentum. Being a large platform, the very product can develop with the magnitude of responses.

Takeaways:

• Public funding also called as Crowdfunding, provides large scale public exposure to support a business or startup.
• Crowd funding essentially entails gathering capital from a large number of people to whom the idea appeals.