“The decision on which type of crowdfunding route to go down depends on the type of business and what the funds will be used for. For instance in order to raise debt funding a company will need to provide evidence that they will be able to service the debt (ie they can pay the interest). This route isn’t appropriate for a start-up looking to grow their business and that is not yet profitable.
Reward based crowdfunding is excellent for businesses who are focused on consumer products at around the £100 or less mark. It’s a fantastic way to test the market for your product and effectively pre-sell some goods. You’ll get lots of really valuable feedback and it will test whether there is a market for your product.
Equity based crowdfunding is the best route for businesses that can scale and are looking for funds to grow their businesses and provide a return for shareholders. “