Crowdfunding

• 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