Crowdfunding

• 13 December 2021
• by Andam KaKil
• Crwodfunding , Resources

Crowdfunding is the use of small amounts of capital from many individuals to finance a new business venture or idea. Crowdfunding is the use of small amounts of money from the public/people to fund a new or growing business idea or start-up. Crowdfunding is a new term and that has been founded in the 21st century in the United State and Europe, the focus of this term is to raise funds for entrepreneurs to start or grow their business ideas through the involvement of people (crowd) to be part of the business idea or grow-up, the people will take part in the business growth. Crowdfunding term can be defined as a new phenomenon that does not fall into the category of traditional finance and consequently involves the public as an active consumer or investor in establishing, developing, and growing a business. In addition, crowdfunding helps entrepreneurs adopt new approaches of undertaking entrepreneurial projects and managing ventures, which in turn leads to new forms of business development in which the “ordinary” crowd gets more closely involved in these firms, as active consumers, investors, or both. Involving the public will support the entrepreneurs to find the source of finance that will help them to not use their own money such as a pocket, savings, credit cards, and loans, crowdfunding is a replacement of all those financial modes. Using online platforms will help the entrepreneurs to reach the public more easily and collect the right number of the crowd who will be interested in financing the business idea because online platforms can also be an easy way for the entrepreneurs to market for the project. The crowdfunding campaign has been facilitated by standardized internet platforms that act as two-sided markets through the participation of a large crowd. The internet platforms play a significant role in coordination between the crowd and the entrepreneurs to fund the business ideas, type of crowdfunding can be categorized into four types (donation, reward, equity, and lending).