Crowdfunding is not just a buzzword; rather, it revolutionizes how small and medium sized businesses and entrepreneurs raise funds without having necessarily to knock on the doors of venture capital or any other traditional sources of finance. According to the study by OECD, this started as a niche tool for non-profit organizations and creative industries that started slowly to gain momentum and grow as a valid tool for for-profit ventures providing financial return on investment and active community involvement.
The Nuts and Bolts
Crowdfunding leverages online platforms to connect entrepreneurs with a large number of small-scale funders.
Why It Works
The popularity of crowdfunding is rooted in the duality of its offering: fundraising and validation. Here, an entrepreneur finds not only capital but also gets to know his target market through interaction. A study cited in the brief points out: "a project crowd-funded often sees revenue and follow-on professional investment increases." To the SMEs, this presents an unparalleled opportunity to expand, say in consumer-facing businesses or creative industries.
Look to the Future
This study shows that crowdfunding still has great potential, especially for new startups and innovative firms. However, there is considerable promise for more global platforms in local solutions, providing they are very well adapted to the specific market.
Crowdfunding is no longer the alternative dog in finance; it is the future. Entrepreneurs, are you ready to embrace it?
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Helping businesses raise funds, is my job, it’s what I excel at.
I’ve successfully assisted over 300 clients in securing more than $20 million in funding.
