Crowdfunding

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