Aside from systems requirements, there are new rules on who is actually allowed to invest their money in crowdfunding. When I’m ready to invest I decide the amount I’m willing to risk for that specific start-up and instantly transfer the exact amount into Seedrs. We do not allow any commercial relationship to affect our editorial independence. Nonprofits might use crowdfunding to meet a particular fundraising goal. Power to the people! Equally it could mean they have not signed up to safe practices. Similarly, the process for crowdfunding varies a bit depending on the platform. There is obviously a large a risk with each start-up that you’ll lose money but that is the nature of investing; I take comfort in the fact that there is also potential to make a large amount of money and it will take only a small amount to succeed to offset a large amount of failures. Donation or rewards-based crowdfunding is not included under the new regulation, nor are community share issues. Take time to do your research if you are interested in a non-regulated platform. Unless an idea is really great I would always select a SEIS registered start-up over one that isn’t. For instance, some startups rely on crowdfunding to raise capital for their budding businesses. I also have the potential to claim back more if the start-up fails and it means no capital gains tax if it’s a success. I also hope that as I start to invest larger sums that I can begin to support some of my investments by providing feedback on ideas. The CFA provides strict guidelines to vet platforms before giving their seal of approval - including making sure your money is ringfenced away from the main finances of the company in case it goes bust, and allowing you a 'cooling off' period in case you change your mind after making a donation/investment. If you click on them we may earn a small commission. So it could be a good idea to runs some checks on your platform of choice if it doesn't fall under the regulatory umbrella. Spacehive: Crowdfunding helped raise money for a community art project. Please include attribution to https://givingassistant.org/nonprofits with this graphic. Here are some top tips from the CFA's Julia Groves to help get your idea noticed: Concerns have been raised that firms benefiting from equity crowdfunding could struggle to access funding elsewhere in the future.Simon Clarke, chairman of the British Venture Capital Association, says: ‘Anything that brings in money to new ventures is a good thing. When crafting your story, be sure to define the problem you’re trying to solve, the solution you’re presenting, the impact donors’ contributions can have, and why this campaign matters now. I haven’t yet felt the need (probably as I’ve not started putting down significant sums yet) to directly interrogate the entrepreneur. The 14 day cooling off period and access to financial ombudsman also apply. However there can be some challenges as well. B&M boss funnels £44m offshore as bargain retailer... ALEX BRUMMER: The Bank of England's three wishes to... First glimpse of the car that secures Nissan Sunderland's... Tesco brings forward its net-zero carbon target to 2035... Disney puts pressure on rivals as its new streaming... BUSINESS CLOSE: FTSE 100 drops amid concern over rising... SMALL CAP MOVERS: Pharma hopefuls sold-off on vaccine... Could you win £500 with one FREE share pick? Some popular crowdfunding websites you might be familiar with include: Examples of Organizations and Nonprofits who have used crowdfunding to raise additional donations are endless but here are few: There’s no end to the ways crowdfunding can be used for good. Although I am still well aware that the statistics show that most start-ups fail I feel that with a good selection process, patience, limiting myself to small investments into a broad range of start-ups and primarily selecting SEIS/EIS eligible start-ups then I am offsetting the risk as much as I possibly can.