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Finance
Sources of Finance
Crowdfunding
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Created by
Lukas Skripka
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Cards (9)
What is crowdfunding?
Fundraising
through
small
contributions from a
large
number of
people
, typically via the
internet.
Crowdfunding is usually in exchange for particular
perks
such as
products
,
discounts
with the firm, etc.
Websites such as
Kickstarter
have been set up to aid
crowdfunding
projects
What is an example of a website that aids crowdfunding projects?
Kickstarter
What is an example of a real-life business that has successfully used crowdfunding?
Pebble
(smartwatch company) who raised $
10.3
million in
one
month using
Kickstarter
Crowdfunding schemes give members of the
public
a chance to
invest
in something they are
interested
in or
passionate
about
What are the main benefits of using crowdfunding as a source of finance?
No
costs
incurred such as
interest
or
repayment
It can be a
fast
way to raise
finance
if people are willing to
invest
No
loss
of
control
over the business
What are the main drawbacks of using crowdfunding as a source of finance?
If the firm doesn't reach their funding
target
, any finance will return to
investors
and the firm will recieve
nothing
Theres no guarantee of
finance
Ideas
and business models presented
publicly
can easily be
stolen
What happens to the invested funds if the firm doesn't reach their funding target in crowdfunding?
The
investors
will
recieve
their
money
back