A business is a transformation of a person's idea into reality. It costs everything to start up a business in terms of physical efforts and monetary values. This is how the concept of 'Financing' came into existence. To be someone's reality from an idea, a person needs funds or more precisely, capital to set up his business and execute its operations and make profits. Considering different type of business, the different sources of fund can be raising of money from public, investments from relatives & friends, self savings and loans from banks & financial institutions. Our study is based on the concept of 'Crowd funding' that has come into existence and is significantly used by a number of businesses (Fridson & Alvarez, 2012).
1. Let us first discuss the various types of funding that were widely used before and are considered as traditional approaches these days.
Such approaches are the ways opted since the revolution of business came into existence. However, with advancement in technology and science, newer and newer ideas coming into effect, another trendy source of fund called as 'Crowd funding'. Various platforms such as Pledge Me enable funding through sources such as loans, equity campaigns and donations. Crowd funding is useful for an entity if it has a strong network among people and has a strong recognition and relations in the market. A strong social background is necessary if a person wishes to fund his business through crowd funding. Also, the crowd funding business can come into effect only if the purpose of it connects with the public and infect, it is mandatory to have the public and such other persons to have a clear understanding of the business and its operations targeted (Girard, 2014).
We cannot disagree that crowd funding is taking up the most popularity these days although the traditional approaches are still relevant. Where crowd funding is an approach of raising money from various individuals, fund raising is an approach of asking for a financial support. The traditional sources are an offline approach that is, fund raising; marketing, branding, campaigns for creating awareness, etc are all done offline. But, the crowd funding, being a modern approach is done online using electronic platforms such as Milaap. Traditional sources comes from those people who see a benefit in your business and are liable to receive those additional benefits they may receive in terms of interest, dividend, profits, etc. However, crowd funders are those people who invest because they believe in a person's idea (Piper, 2015).
2. The crowd funding, being a popular source of fund raising, also has certain advantages and disadvantages. It may seem attractive to a majority but it can still be not a good idea for some. The advantages of crowd funding can be in different terms to both investors and the business. There is no clear answer to this query however, three reasons can be considered as the advantages for investors:
When an individual wants to make an investment in a profitable company, it has three options - firstly, it can find a company on its own and manage the investment alone, join some angel investors group and make investment as directed (Kuti, 2014). As a result, it is a task for a potential investor to identify a company with good plans and also, such decisions require a good network. Costs such as legal formalities cost, background checks cost, and equity documentation costs, fees for finding etc are being minimized. The crowd funding website minimizes the cost by standardizing the legal documents, background check up procedures, and other expensive expenses, therefore, in case of other costs, the investors pays nothing.
The advantages of crowd funding to the business are:
Where there are advantages to both the investors and the business, there exists disadvantages also of this idea. Let us enumerate the disadvantages of this modern approach (Rayman, 2009):
3. Crowd funding, being a popular source of funding, isn't at the bottom level rather the concept of this modern approach has spread to big companies including multinational enterprises (MNEs). Such MNEs are in support of this approach as it uses an e-platform and gives recognition to both small investors and business plans of small vendors (Bragg, 2016).
Such MNEs direct their departments to study the concept of crowd funding as such MNEs target to invest in proven business plans and so as to influence one's life by bringing a life in its business plan (Lacasse, 2016). These MNEs often make huge investments in one go and has huge investments in return; in that case, funding small numerous business plans is no big deal for them rather they are like angels to these startups. In such a large population, to reach all the targeted people, Internet is the most easy source to reach to a thousand of people at one go and similarly, investors comes to know about varieties of plans and so according they make their decision. MNEs uses such crow funding websites to search potential plans and make investments to have a favor in return maybe, or to let small vendors get an opportunity of bringing their dream into reality, etc (Case, 2012).
The diagrams shows us an analysis of approx funds raised during past few years depicting the growing popularity of the crowd funding approach. The pie chart signifies the using of such fund raising approach over traditional approaches, that is, for example, equity funds (Mattessich, 2016).Such an influence will have a positive impact on the lives of both business startups and MNEs. For a business startup, it acts an an opportunity to turn into reality and for an MNE, it is more likely of doing good for such small projects in comparison to the revenues earned by them and developing a network for itself and generating goodwill out of it. Also, such investments will boost the confidence of these vendors in their business plans while it will create a favorable impact on the social and economic environment of such MNEs (Paul, 2014).
It is not that all the projects are going to succeed being funded by crowd funding, but a well informative plan if executed well can make money and bring benefits both in terms of happiness and money. However, we should consider the fact that crowd funding is still unknown to a huge population inspire and therefore; inspire of increasing usage of mobile phones & internet, therefore, awareness is to be created to make this approach more popular. It is likely to happen by 2025 that crowd funding approach will overcome the traditional approaches and internet will became the most useful medium for fund raising (Herciu, 2017)
Bragg, S. M. (2016). GAAP Guidebook. [S.I]: AccountingTools, Inc.
Case, P. (2012). Environmental Risk Management and Corporate Lending: A Global Perspective. Boca Raton, Fla.: CRC.
Fridson, M., & Alvarez, F. (2012). Financial Statement Analysis: A Practitioner's Guide. New York: John Wiley & Sons.
Girard, S. L. (2014). Business finance basics. Pompton Plains, NJ: Career Press.
Herciu, M (2017), "Financing Small Businesses: From Venture Capital to Crowdfunding." Studies in Business & Economics, 12(2), pp. 63-69
Ittelson, T. (2009). Financial Statements: A Step-by-Step Guide to Understanding and Creating Financial Reports. Franklin Lakes, N.J.: Career Press.
Kuti, M. (2014). Crowdfunding: How to Fund Your Business Idea. Retrieved from www.business.gov.au: https://www.business.gov.au/info/run/finance-and-accounting/finance/crowdfunding-how-to-fund-your-business-idea
Lacasse, R. M. (2016). Digital-Tsunami-Site-Web. Retrieved from https://fintechlab.ca: https://fintechlab.ca/wp-content/uploads/2016/11/Digital-Tsunami-Site-Web.pdf
Lerner, J. J. (2009). Schaum's outline of principles of accounting. New York: Schaum.
Loughran, M. (2010). Auditing For Dummies? Hoboken, NJ: John Wiley & Sons.
McLaney, E., & Adril, D. P. (2016). Accounting and Finance: An Introduction. United Kingdom: Pearson.
Mattessich, R. (2016). Reality and accounting. [S.I.]: Routledge.
Paul, K. (2014). Managing extreme financial risk. Oxford: Academic Press, Elsevier.
Pratt, J. (2009). Financial Reporting for Managers: A Value-Creation Perspective. Hoboken: John Wiley & Sons, Inc.
Piper, M. (2015). Accounting made simple. United States: CreateSpace Pub.
Rayman, A. (2009). Accounting Standards: True or False? . New York (Estados Unidos): Routledge.
Siciliano, G. (2015). Finance for Nonfinancial Managers. New York: McGraw-Hill.
Smith, O. (2016). The good, the bad, and the ugly side of crowdfunding. Retrieved from www.thememo.com: https://www.thememo.com/2016/02/18/crowdfunding-good-bad-ugly/
To export a reference to this article please select a referencing stye below:
My Assignment Help. (2019). Crowd Funding And Impacts Of Raising. Retrieved from https://myassignmenthelp.com/free-samples/crowd-funding-and-impacts-of-raising.
"Crowd Funding And Impacts Of Raising." My Assignment Help, 2019, https://myassignmenthelp.com/free-samples/crowd-funding-and-impacts-of-raising.
My Assignment Help (2019) Crowd Funding And Impacts Of Raising [Online]. Available from: https://myassignmenthelp.com/free-samples/crowd-funding-and-impacts-of-raising
[Accessed 15 December 2019].
My Assignment Help. 'Crowd Funding And Impacts Of Raising' (My Assignment Help, 2019) <https://myassignmenthelp.com/free-samples/crowd-funding-and-impacts-of-raising> accessed 15 December 2019.
My Assignment Help. Crowd Funding And Impacts Of Raising [Internet]. My Assignment Help. 2019 [cited 15 December 2019]. Available from: https://myassignmenthelp.com/free-samples/crowd-funding-and-impacts-of-raising.
At MyAssignmenthelp.com, we have a brilliant team of stalwarts who have a least a decade experience in academic writing. We will provide you with supreme research paper services without compromising the quality paper. From providing you with unwavering assistance in selecting good research paper topics, drafting an impeccable research paper outline, to drafting a good research paper cover page; we can make everything fall into place. Our services charges are extremely reasonable and we will customize it as per your budget. If you want an A+ in your research paper, do not hesitate to give us a call. We will deliver your paper prior to the deadline.
Answer: Introduction AYR Co. is considering two projects for investment namely Aspire and Wolf with the objective of enhancing shareholders’ wealth and also gain a higher market share. Market research has been already conducted on the two projects and based on the available information, financial analysis needs to be conducted so as to advice on the superior of the two projects. Additionally, the critical qualitative factors also need t...Read More
Answer 1 Part A (i) The interest that will be paid in first month of 25th year of loan is $ 705.6246. The formula for computation of interest is IPMT(Rate, Per, Nper, PV, FV) Accordingly, the formula put in was IPMT(0.036/12,289,360,-800000) The solution that was arrived stands at $ 705.62 Part A (ii) The total amount of interest that will be paid over the life of the loan is $509378.61. Sl No Particulars Amount (...Read More
Answer: Answer 1: Significance of enhancing qualities of financial information: Financial statements of the entity are prepared and presented with the objective of meeting the information needs of the stakeholders of the company. Stakeholders are the parties whose decision making processes are influenced by the financial performance of the reporting entity. There external stakeholders are not involved in the internal business functions. Howev...Read More
Answer: Introduction: “Strategic financial management” is an approach of financial management that takes the concern on the strategic policies and goals of a business. These policies assist the business to make strategies and policies to meet the financial objectives and the goals. This process takes the concern of all the financial related transactions and aspects that could affect the financial process of a business in any manne...Read More
Answer: Introduction: The study focuses on the identification of various categories of stakeholders of chosen organization. Analysis of stakeholders group is done by the application of stakeholder view model that helps in addressing values and morals of stakeholders in managing organization. Such model is regarded as descriptive that helps in providing concepts and language for describing corporations and determining their impact on env...Read More
Just share your requirements and get customized solutions on time.
Our writers make sure that all orders are submitted, prior to the deadline.
Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.
Feel free to contact our assignment writing services any time via phone, email or live chat.
Our writers can provide you professional writing assistance on any subject at any level.
Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.
Get all your documents checked for plagiarism or duplicacy with us.
Get different kinds of essays typed in minutes with clicks.
Calculate your semester grades and cumulative GPa with our GPA Calculator.
Balance any chemical equation in minutes just by entering the formula.
Calculate the number of words and number of pages of all your academic documents.
Our Mission Client Satisfaction
My assignment was completed on time and i got complete marks. IT WAS EXACTLY THE WAY I WANTED IT.
This was amazingly put together, I could not have asked for a better company to do my assignment. Delivered earlier than expected. Absolutely amazing.
thank you again, it is a good work, everything is perfect. I am very happy. It is not the first time and I know that I can count on you.
Love using this company they are very useful always on time . I absolutely would recommend them