Challenges Faced By The Crowd Funding

The last twenty years the financial services industry encountered significant regulatory problems. Equity crowdfunding introduces an innovative manner to raise capital and provide greater societal benefits. Fundraising has been going on for hundreds of years, and crowdfunding is transforming the approach to developing funds. In American history, our railroads relied on private individuals to pay for the infrastructure and development (Davies, 2014). Railroad companies employed crowdfunding and investors had the incentive to contribute. Projections illustrate the equity-based crowdfunding industry in the United States (U.S.) will experience rapid growth because of regulatory changes stemming from the Jumpstart Our Business

Upon passage of the JOBS Act in 2012, the startup community celebrated the bill’s potential. Its intended effect as to herald the next “big thing” by uncorking the excess cash tied up by the meltdown of 2007. The age of crowdfunding had arrived, or so it seemed. While the JOBS Act has been successful in accelerating capital formation, the intentional sequester of Title III by the SEC has the most promising aspect of the Act, Crowdfunding, indeterminate on-hold. Three years of waiting for SEC regulators to define the boundaries and rules of how crowdfunding will become a reality in the U.S. While such delays have proved frustrating to entrepreneurs and investors alike, it has also provided ample time for regulators to examine similarly

Crowdfunding is a way for bringing capital up in little sums from an expansive gathering of individuals utilizing the Internet and online networking. Unlike funds from venture capitalists or angel stakeholders, the capital raised through crowdfunding does not really purchase to the lender a share, and there is no assurance that it will be reimbursed if the project is fruitful. Instead, people are requested to make micro -investments or contributions to causes and projects they believe in, thus allowing the work to be finished.

According to Pratt and Gonsalves (2017), they define Crowdfunding as non-profit organisation or individual that want to accomplish their goal by obtaining funds through the public or crowd. Meanwhile, the business organisation or entrepreneur tends to ask for fund through the crowdsourcing website or Crowdsourcing app in order to proceed or complete their project.

Mollick and Nanda (2015) discovered that people in general are more likely than professionals to fund projects that offer multiple levels of rewards, contribute updates, and display pictures and video. People in general and professionals are influenced to fund entrepreneurial projects in different ways. “Our second finding is that despite the broad congruence in evaluation, we see a systematic pattern in terms of the disagreement. Of the projects where there is no agreement, the crowd is much more likely to have funded a project that the judge did not like than the reverse. Approximately 75% of the projects where there is a disagreement are ones where the crowd funded a project but the expert would not have funded it. We also see a clear pattern in terms of the characteristics of projects that are liked

Crowdsourcing development requires the investment of substantial capital and resources over a significant time period before the launch of the revenue-generating platform. And the possibility of revenue return is contingent on competently evaluated investment opportunity. Have you given any serious thoughts on crowdsourcing as an investment vehicle? What are some of the steps you are willing to take to secure funding? How serious are you committed in fundraising to get off the ground? What do you currently see as obstacles impeding the development progress of your crowdsourcing and/or crowdfunding currently been contemplated and planned? How do plan on overcoming some of these obstacles?

Crowdfunding is difficult to define, as it is such a recent innovation with a plethora of different uses. Schwienbacher and Larralde (2010), define crowdfunding as “an open call, essentially through the Internet, for the provision of financial resources either in form of donation or in exchange for some form of reward and/or voting rights in order to support initiatives for specific purposes.” Mollick (2014) argues though that aspects such as the goal of the crowdfunding effort and the goal of the investors are ignored in this

A 2012 National Federation of Independent Business (NFIB) study says about 79% of small business owners manifested in their credit cards to start their business. And it is rather convincing that in average 4 out of 5 small business owners are using credit cards. One fine example to this financial source is the founders of Google, Larry Page and Sergery Bin have used their credit cards to start their business. However, there are some disadvantages to this method, as if done in a right way then it would be beneficial. As such planning of the business structure and risk analysis are important.

Crowdfunding is an emerging source of finance for start-ups that involves calling for money from public in general, mainly via Internet for exchange of either equity or product or any other reward or as a means of donation. It focuses on generally small contributions from a large number of people to achieve a targeted financial requirement without involvement of a intermediary.

For the nascent industry to grow, much needs to be done to make crowdfunding known to the public, and to improve crowdfunding’s attractive for both companies and investors.

Lending-based crowdfunding is a nascent fintech market where individual investor and borrower meet each other to make transitions. [Feature] This market is attracting an increasing amount of attention from researchers in recent years. Some researchers examine the determinants of probability of successfully funding, the interest rate and loan performance, others care about the various characteristics of borrowers, the decision making behavior of investors. There are also studies on the design of platforms. However, one aspect which still receive inadequate attention is the username mechanism. Interesting topics include: What is the association of username with lending transaction? What is the role of username in investment decisions?

Purpose – The purpose of this paper is to examine key emerging trends in Entrepreneurs in India its reasons for growth and impact towards economy and society as a whole.

In the country of India there are many creative programmes, one of their projects are ‘the solar electric rickshaw.’ When new technological inventions are being made, the consumer market also changes accordingly. Hence the factors of technology, market and needs of public are to be considered. So these new inventions target a market, where there’s already a product which has a foothold. The lower group of the pyramid are targetted to buy this new innovation. Since the concept of micro financing has evolved, it gave rise to micro – consumers, micro – producers, micro – entrepreneurs, micro – firms, micro – entrepreneurs and lastly even micro – innovators.

One of the biggest examples of success of microfinance is Bangladesh. However talking about the Indian context of Micro-finance, as a concept it has made its presence felt in India through several prominent MFIs and NGOs and now Banks are also stepping forward. Microfinance has a great scope in creating sustainable economic development in the economically backward areas of India. Work has already been started in promoting micro-finance and making it a provider of credit and banking facilities for those not covered under the purview of the Indian banking system and the associated benefits. However, apart from its primary function of extending the benefit of credit facility to the rural community and economically backward classes, microfinance also has a huge potential in creating community based entrepreneurship with the ability to create significant employment in the communities.

SMEs (Small and Medium enterprises) are one of the key drivers of India’s economic growth. Over the years a large number of small and medium size companies have grown in the market. Small and Medium Enterprises (SMEs) have been contributing so much towards the GDP of India. With their emergence and huge potential, the government of India launched regulated trading platforms for the SMEs, which allows them to get listed without bringing an IPO. The stock exchanges for these enterprises were introduced so that these firms can do better in financing activities for themselves. Of course, there is an option of adding debt, which also helps improve the overall return on equity, but the cost of raising debt for SMEs is relatively higher. High interest expense does not look very good on the profit and loss statement of a growing company. Thus, in order to fund the next stage of growth without excessive interest cost burden, companies look to access equity funds via capital markets. This is where listing on an exchange comes into the picture. The research would include the implications of the introduction of the BSE and NSE SME stock exchanges how well they are performing. Also, what is the response from the SME sector.