Investment Crowdfunding — What is it and how does it work?

What is investment crowdfunding?

Investment crowdfunding is a form of collective financing where many small investors jointly finance a project — usually real estate or business — in exchange for a share of profits or interest.

Unlike Kickstarter-type crowdfunding (where you get a product), here you invest money expecting a financial return.

How does real estate crowdfunding work?

1. Developer submits a project to a crowdfunding platform
2. Platform verifies the project and publishes the offer
3. Investors contribute funds (typically from 1,000 PLN)
4. Developer executes the investment (construction, renovation, sale)
5. After project completion, investors receive capital return + interest

Typical parameters:

• Return rate: 8–14% annually
• Investment period: 12–24 months
• Minimum investment: 1,000–5,000 PLN

Crowdfunding platforms in Poland

• Social.Estate — one of the largest, focus on real estate
• Crowder — development projects
• Margo — business and real estate financing
• Reinvest24 — international platform

Advantages

• Low entry threshold to real estate market
• Potentially higher returns than bank deposits
• Diversification — you can invest in multiple projects

Risks

• Lack of liquidity — money frozen for project duration
• Developer risk — delays, cost overruns, bankruptcy
• No BFG guarantee — this is not a bank deposit
• Regulations — market still developing, not all platforms under KNF supervision

Crowdfunding vs other forms of real estate investing

Compared to REITs, crowdfunding offers higher potential returns but at the cost of liquidity and higher risk. REITs you can buy and sell on the exchange in seconds — from crowdfunding you exit only after project completion.

How Freenance can help

Freenance allows you to track crowdfunding investments in your portfolio alongside stocks, ETFs and bonds. You get a complete picture of asset allocation and know what portion of your portfolio is illiquid. Runway takes into account all your assets — including those frozen in projects.

👉 Track your investments with Freenance — freenance.io