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Do you get your money back from crowdfunding, and when?

A starter question from the Crowdinform team, to get the conversation going. Share your own experience below.

CT Crowdinform team · · 0 following

Some crowdfunding is a donation, some is a loan, some is a share in a company. When does the money come back to the person who put it in, and when does it not?

Answer
CT Crowdinform team Crowdinform guide answer

It depends on the type of crowdfunding:
- Donation and reward crowdfunding are not investments: backers do not expect a financial return, so the money does not come back (rewards are perks such as early access to a product).
- Loan-based crowdfunding: you lend money and receive interest and repayments on a schedule, with the capital back at the end of the term.
- Debt securities (bonds or notes): you receive interest, and the capital back at the end.
- Equity: there is no repayment date. You earn through dividends, or a gain if the company is sold or listed, which can take years.
- Real estate: either a loan to a developer (interest and repayment) or a share in a property (rent or a share of the sale).
In every investment type the money is usually locked in until the end of the term, early sales are often impossible or at a discount, and borrowers or companies can fail. Capital is at risk: crowdfunding investments are not covered by deposit guarantee schemes, can lose part or all of their value, and may be hard to sell before the end of their term.

Drafted with AI from the sources below and checked by Crowdinform. General information, not investment advice. Capital at risk.

Sources: crowdinform.com/en/articles/what-is-crowdfunding · crowdinform.com/en/articles/types-of-returns-in-crowdfundin…

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