How does crowdfunding work?

Crowdfunding works online through crowdfunding online websites.

You will need to register your details on the website if you want to start raising funds or see other people’s pitches to invest in.

For as little as £5, you can invest in a project that you’re interested in, which could range anything from a small startup to funding a film or theatre production.

The business, individual or social enterprise looking to raise money should tell you:

• How much needs to be raised

• How much has been raised so far

• The share in the business offered

• What the money will be used for

• How long the pitch is open for

• How many people have already invested

• When you will receive a return for investing

Be sure to contact them for further information if anything has been left unclear in their pitch.

If you decide to invest in a pitch, you will have a 14 day cooling-off period in case you change your mind.

Investments can only go ahead if the business, individual or social enterprise meets their target amount in the time specified - if not your money will be returned.  

If things work out with the your investment, your returns could vary anything from seeing your share price rise, receiving dividends or potentially a finished product or service.