Crowdfunding

• What are the benefits?

  • cheap investments when other sources of external finance may not be available
  • if newsworthy it might attract good publicity
  • social media can be easily used to inform investors on progress
  • investors may have experience or skills that they can offer the business
• What are the drawbacks?

  • investors will need to be offered a return (reward or share)
  • schemes will provide shares (dilutes control of original owner)
  • risk of there being a limit to amount investors are willing to pay
  • business idea may not be of interest