The New Ways to Raise Capital: An Exploratory Study of Crowdfunding

Abstract

Purpose -Paper aims is to describe, analyze and to increase the knowledge of the emerging crowdfunding phenomenon. This can be defined as the practice of funding a project or venture by raising a lot of small quantities of money from a huge number of people. Even though the number of academic studies has been increasing, the coverage of the population is relatively weak and not well understood by entrepreneurs and individual investors.Design/Methodology/Findings -The research can be classified as an exploratory research. It focuses on how the crowdfunding works. The research addresses the following research questions: What is crodwfunding? Which are the main characteristics of this phenomenon? Wihic are the principal strengths and the main weaknesses of crowdfunding? The findings expose purposes, characteristics, roles and tasks, and investment size of crowd-funding activity.Practical implications -The findings have implications for service managers interested in managing crowd-funding initiatives and to improve the activity of the consumers.Originality/value -The paper analyses a new emergent phenomenon. It aims to define the user/costuemr's role from co-creation to investment.

Exposure to Crowdfunding Campaigns: What increases the likelihood of donating to a crowdfunding campaign?

“…It has become easier for the entrepreneurs to generate funds for the project through virtual crowdfunding platforms; rather than being dependent on venture capitalists, banks and other financial institutions (Herburg et al 2014). Crowdfunding is a virtual activity in which people pool their money together, invest in the project and thus financially support the project initiated by other people or other organizations (Rossi, 2014). As mentioned earlier, crowdfunding is a recent phenomenon and therefore, its consequences are not yet fully understood (Rossi, 2014).…”

“…Crowdfunding is a virtual activity in which people pool their money together, invest in the project and thus financially support the project initiated by other people or other organizations (Rossi, 2014). As mentioned earlier, crowdfunding is a recent phenomenon and therefore, its consequences are not yet fully understood (Rossi, 2014). Rossi also discusses how crowdfunding is developed.…”

http://www.scholarpublishing.org/index.php/ABR/article/view/3581

“…[41][42] [43] Many researchers have considered the topic of crowdfunding from different perspectives. From the aspect of efficiency over bank loans [44], in terms of strategies to motivate the crowds [45], or even in terms of the advantages crowdfunding has for SMEs as an alternative finance source. Below is a graphical representation of this process Source:…”

Przedsiębiorczość w teorii i badaniach. Perspektywa młodych badaczy

“…Crowdfunding immediately became an increasingly popular means of raising money for both personal and creative ventures, particularly in the early stages of business, when capital is most needed but most difficult to get (World Bank, 2013). One reason for its popularity is in the relatively cheap and easy way of raising money from a large number of people in small amounts with web technology and existing online payment systems (Gerber, Hui, and Kuo, 2011;Rossi, 2014). A group of people, the crowd, financially contributes small amounts to projects, products, or ideas.…”