By: Olinto Mendez – Strategic Development Manager in Solidaridad Latina

Today we’re going to talk about one of the most common problems that arise in Latin America with crowdfunding. And we’ll do it by addressing a specific case, Colombia. How complicated is it to create a crowdfunding campaign in Colombia? Just saying, a problem could be the declaration of the obtained money.

However, three Colombians showed that there’s a way to solve this problem. And we’ll explain it to you.

Crowdfunding from Colombia

To begin, we’ll mention three real examples that were given with friends from Colombia and we talked about the case of:

  1. Mova Cycling Jacket: Campaign created by Roland Harper.
  2. Fachadas Bogotanas: Made by Lizeth Leon.
  3. Girando Para Atrás: Made by Nicolas Ospino.

In all three cases, each person had complications to declare the money obtained in their journey. However, after reviewing what happened in detail, we concluded that there are three ways to solve this situation if it happens to you:

  1. Contact your local bank and seek advice from them to comply with the security policies they have, in case you plan to receive resources through this channel.
  2. Learn about the legal part of your campaign, that is, locate the existing contract between the crowdfunding platform and you. As well as everything that allows to evidence the existence of the campaign and its entire process, including emails that notify you of the start and closure of your day within that site.
  3. And last but not least, ensure that all communications between your bank and you are also documented in order to keep record of the steps taken. It’s likely that your bank already has experience in that matter and that there aren’t major complications. But if not, keep these three recommendations in mind. Which can make a difference at the time of your closing and the start of your perks plan.

Remember that even if your country is not aware of how this way of democratizing access to money works, it doesn’t mean that it’s not possible. It’s just a matter of time and work with absolute transparency.

Financial regulation

What we mentioned before occur because of an issue that we mentioned at the beginning. This issue not only affects Latin America but also other countries. The issue is that many of those countries regulate the money obtained by organizations and companies, both physical and digital. Including crowdfunding platforms.

Crowdfunding is nowadays a well regulated activity supervised by the United States Department of the Treasury, through the Office of Foreign Assets Control (OFAC).

Financial Regulation Crowdfunding
The regulation of money in certain countries has made it difficult to carry out crowdfunding.

This generates a high level of confidence in the resources obtained there by those entrepreneurs who carry out crowdfunding campaigns. Within any of these crowdfunding platforms. Which are legally registered and authorized to function by these authorities. After a due process of scrutiny for these to work.

Certainly in the beginning, crowdfunding in North America was born as an unregulated activity. But its positive impact on the development and growth of start-ups and as well as the benefit it has represented for social assistance, has meant that the power of crowdfunding hasn’t gone unnoticed.

And this is how in the period of President Obama on April 12, 2012, the Jumpstart Our Business Startups Act, better known as the JOBS Act was created. Where a whole legal ground was created so that small businesses could use funds more quickly and without so many protocols. As it happens in banks or angel investor funds.

Latin America and crowdfunding

This is why many entrepreneurs put their eyes on crowdfunding platforms in North America. Since we’re talking about the largest market in the world in this matter. Which in numbers is expressed as 17.2 billion and because the best conditions to mount a campaign to raise funds are present there.

[bctt tweet=”We see with great interest how Latin Americans have decided to venture into crowdfunding.” username=”solidaridadla”]

Ah, and by the way, without leaving their countries.

Crowdfunding Countries List
A graph that shows a world map with countries where there are crowdfunding platforms. Notice how the US has the most. Source: Inmocrowd

The truth is that it’s not the same to start a crowdfunding campaign in Latin America through Latin American platforms. Compared with doing it from Latin America but on platforms from the United States. Why do we say this? Simple. Numbers show that the amount of options in North America is considerably higher.

On the other hand, there’s the almost nonexistent regulatory legal framework in South America. For many governments and banking systems in these countries, it’s such a new subject that they have no idea how to deal with it.

But this doesn’t have to be a sign of complication. If you do an investigation you’ll find that you have the option to start a crowdfunding campaign from the comfort of your country. Within a platform in North America.

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Related: BienDateao: Breaking Paradigms Through Crowdfunding

Are you ready to create your own crowdfunding campaign from Colombia?