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Essay On Crowd Funding

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Crowd funding is an alternative method available to entrepreneurs aiming to gain money to finance their business enterprises. Kickstarter is a popular website that helps aspiring inventors and artists find investors to fund various projects. It is often difficult to find a single investor to help finance a project, and crowd funding can help alleviate the need for a single investor. Crowd funding allows many financial backers to offer relatively small amounts of money to aid the development of new products and ideas. In an effort to ensure success, potential entrepreneurs must fully understand the functions of Kickstarter, capitalize on the advantages of crowd funding, and provide adequate information to gain the desired level of…show more content…
The table below further illustrates the funding levels available and pledged to produce this documentary. There are several reasons crowdfunding is advantageous to business professionals. In today’s economy, it can be difficult for entrepreneurs to find funding in the traditional manner of applying for a loan with a business plan and getting approved. “In 2012, the total number of loans and money distributed in the U.S. via the Small Business Administration has dropped as much as 20%”(Prive, 2012). An extremely high percentage of business plans received are rejected. Crowdfunding offers an alternative that helps businesses ventures obtain funding. Crowdfunding reduces risk, can assist in product improvement, identifies customers, and provide free publicity. One of the most appealing benefits of crowdfunding is that it, for the most part, comes with little to no cost. Crowdfunding allows entrepreneurs to gain funding for products without the need to give up equity before turning a product concept into a product available in the marketplace. It is not uncommon for new business owners to fail to account for every possible pitfall in the early stages of operating a small business. “By having a crowdfunding campaign, the entrepreneur has the ability to engage the crowd and receive comments, feedback, and ideas”(Prive, 2012). People who contribute pledges to the campaign are future customers for the business. These donations come from
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