Facilitation Of Crowd Funding Samples †MyAssignmenthelp.com

Question: Discuss about the Facilitation Of Crowd Funding. Answer: Background Crowdfunding can be traced back to the 1700s when the Irish Loan fund founded by Jonathan Swift started to give loans to low-income families in the rural parts of Ireland. By the 1800s more than 300 crowd funding programs gave out small sums for short periods of time. Bruton et al. (2015, p. 9) noted that its peak, 20% of all Irish households had used this program. They further explain that after this period there was no documented evidence of crowdfunding until 1997 when British rock band Marillion funded their U.s tour when their fan base raised $60,000 online to give to the band. In 2000 Artistshare became the first dedicated crowdfunding website (Schwienbacher et al., 2013, p. 585). From 2009 crowd funding kicked off and since then it has become a novel way for entrepreneurs to raise capital for various projects. Facilitation of crowdfunding is done through a website, or an application called a crowdfunding platform. These platforms offer founders/entrepreneurs their webpage where they explain what the project entails, its outcomes and the outline of the amount of money they needed to achieve the potential outcome (Schwienbacher et al., 2013, p. 586). They can also state how many days or months their campaign will run for collect money from backers/funders. Research from Northwestern Universitys Segal Design Institute suggests that crowdfunding is often found by campaign creators to be strenuous and time-consuming. For some entrepreneurs, they must deliver new skill sets entirely new to them for they have to deal with funder relations, marketing and publicity which require time and effort (Harrison, 2013, p. 283). Top crowd funding websites include kick-starter, gofundme, Indiegogo, Crowdrise, Crowdfund, Ozcrowd, Crowder and Pozible Types of crowdfunding Equity crowdfunding is whereby an individual /organization invests a big sum of money in exchange for a piece of equity, shares or a stake in the company. Donation-based crowdfunding is designed to raise money for charitable or social projects, in this case, there is no equity nor reward, a tax deduction may be the incentive (NiBusiness, 2018). In the website of NiBusiness (2018) it is also explained that reward-based crowd funding allows investors to raise money in exchange for a non-financial reward, the reward may range from free software licenses, use of the invention or free gifts. Debt crowdfunding consents financiers to fund your project in exchange for monetary returns on their investment (NiBusiness, 2018). This finance option may provide you with borrowing at a lower cost than that offered by applying for a loan through a bank. The advantage of this model is that it may be easier to win support for a campaign, as investors are attracted to getting a return. Crowdfunding in innovation Fast Company (2018), suggests that crowdfunding has changed how entrepreneurs bring innovations and products to the market. According to this website, it has also allowed millions of innovators to raise money, join a wider network of potential funders and build brand awareness, all while still in the product development process. Examples of crowdfunded products include the Glif. Photography has become an integral part of cell phone users with new smartphones coming out with more focus on the camera pixels. In 2010, almost eight years ago, through Kickstarter, Dan Provost Tom Gerhardt launched the Glif, a tripod mount for the iPhone 4 (Fast Company, 2018). After realizing that smartphones had become an integral tool, for journalists, filmmakers, regular smartphone users and photographers, they had one target- to create the best tripod mount for smartphones. The internet communities response to their campaign was outstanding. They were able to initially raise more than $137,000 for th e device (World Bank, 2013). Since then, they have released several updates to the Glif not only for iPhone but 90% of the current phones in the market. The Glif allows smartphone users to attach their phones to a tripod or prop their phones up at different angles (Bruton et al., 2015, p. 9). The photography landscape has changed drastically since the launch of the original Glif in 2010. With each successive smartphone, the camera is getting more and more incredible. The Oculus Rift is a virtual-reality gaming headset worn by the user for gaming. It raised $2.4 million via kick-starter. Oculus has disrupted the traditional gaming platform as we know it. As argued by Bruton, et al. (2015, p. 11), in the past one would use a controller connected to a game box/pc and a monitor. However, the Oculus allows the user to become the game. The user enters the game and becomes part of the simulation. A player can go inside their favorite film, hang out with friends or space travel or time travel (Bruton et al., 2015, P. 12). Oculus VR has been acquired by Facebook Inc. for $2 billion. Conclusion To be successful in crowdfunding the quality of the project is important, and one should be well prepared to have a good pitch ready. A founder should develop SMART goals Specific, Measurable, Achievable, Realistic and Time-based to deliver a product on time. Careful planning and organization are important to achieve crowd funding goals. Crowdfunding is a disruptive change the funding of new ventures. Key insight 1. The subtleties and ever-changing aspects of crowdfunding have been largely unstudied due to its rapid rise as a source of capital. Being well prepared, social readiness, as well as idea quality, have been linked to the rate of project success. Geography is a major factor associated with new ventures, but crowd funding has disrupted this idea of traditional constraints imposed by geography (Allison Davis, 2014, p. 53). Social media platforms and the availability of online communities have made the creation of new ventures around the world a possibility (Pozible, 2018). A founder in Australia can get funds from a funder in America or a founder in Africa may get funding from funders is Australia and Israel. Online communities can interact, fund and coordinate with crowdfunding efforts to spawn new services and products with diverse people in different parts of the world. Crowdera is an international platform which allows an entrepreneur to raise funds from countries all over the world and in multiple currencies through the same campaign Key insight 2. It has also been noted that there was a problem of logistics when it came to delivering products to the markets as well as to funders with very few founders doing so in the time frame they had given. An example is The Pebble E-Paper Watch was able to raise $10,266,845 in 38 days, but as months passed, the funders became distraught when production came to a halt raising questions of whether founders would deliver large orders in a little time (Mollick, 2014, p. 3). They were able to deliver in 10 months after their said time frame. References Allison, T. Davis, B., 2014. Entrepreneurship Theory and Practice. Pp. 53-73. Bruton, G., Khavul, S., Siegel, D. Wright, M., 2015. New Financial Alternatives in Seeding Entrepreneurship: Microfinance, Crowdfunding, and Peer-to-peer Innovations. Entrepreneurship Theory and Practice, 39(1), pp. 9-26. Fast Company, 2018. The Worlds Top 10 Most Innovative Companies in Crowdfunding. [Online] Available at: https://www.fastcompany.com/40532754/this-is-how-regulation-affects-airbnb-in-san-francisco-report-says [Accessed 18 February 2018]. Harrison, R., 2013. Crowdfunding and the Revitalisation of the Early Stage Risk Capital Market: Catalyst or Chimera?. Venture Capital, 15(4), pp. 283-287. Mollick, E., 2014. The dynamics of Crowdfunding: An Explanatory Study. Journal of Business Venturing, 29(1), pp. 1-16. NiBusiness, 2018. Crowdfunding. [Online] Available at: https://www.nibusinessinfo.co.uk/content/types-crowdfunding [Accessed 18 February 2017]. Pozible, 2018. Introducing Equity Crowdfunding Platform Birchall: Everyone should have the Opportunity to Invest in the Brands they Love.. [Online] Available at: https://pozible.com/birchal/equity-crowdfunding [Accessed 18 February 2017]. Schwienbacher, A., Belleflamme, P. Lambert, T., 2013. Crowdfunding: TApping the Right Crowd. Journal of Business Venturing, 29(4), pp. 585-609. Schwienbacher, A. Larralde, B., 2010. Crowdfunding of Small Entrepreneurial Ventures. Pp. 1-23. World Bank, 2013. Crowdfunding's Potential for the Developing World. In: Washington, DC: World Bank.