Rewards v Equity

Posted: Sun, 19 February 2012 by Michelle

Bloom is a reward model. If you put your project on our site you don't have to give up any equity or ownership of your business, nor do you have to pay any of the money back. 

Simple you'd think, but there's some pointless and ill-informed scaremongering going on. From webinars proclaiming crowdfunding is a bad idea to simple confusion over what is/isn't/could/couldn't be legal. While it's important to engage in discussions and debate about the value, opportunities and potential pitfalls of crowdfunding, it's only fair that these should be based on fact. So, time to set the record straight ... 

There are clear distinctions between the three differing crowdfunding models:

Peer to peer, or debt-based - a simple loan that must be paid back. Loans are straightforward, it's a simple transaction, you just have to make sure you can repay it.

Equity-based - you sell shares or, more often, parts of shares in return for investment. Individuals who give money to your project are investors and own equity in your company. The perceived wisdom is, with an early stage business, the less equity you give away the better.

Reward-based - which is the Bloom model. In this case, the backer makes a promise to pay you money (if you reach your target) and receives a reward in return. Often but not always, the reward is the product or service the money is being used to develop and deliver, so in effect, pre-selling.

Bloom is a reward model. If you put your project on our site, you don't have to give up any equity or ownership of your business, nor do you have to pay any of the money back.

Bloom is all about encouraging and motivating project owners to successfully reach their targets, it's about encouraging and motivating backers to make promises that contribute to a greater goal.

With Bloom, you don't give up equity or repay the money, just deliver the reward and you retain complete ownership of your business.

Promises and rewards, what could be simpler?