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Starting A New Business: Crowfunding Essay

855 words - 4 pages

To start any new business of their own, people back step for one main reason “funds”. In spite of having a very clear picture on what business to start, people being naive have their concerns towards how to start. One such solution for this problem is “Crowdfunding”. This method helps in raising the funds for the new businesses being started by gathering small amount of funds from large group of people over the internet (Turban, Volonino & Wood, 2013). At the start, crowdfunding have been used by charities to raise money. As main challenge in starting a new business is “Finance”, crowdfunding is used in diverse. For every small or new business being started getting loan from the bank is ...view middle of the document...

Strengths are the added values and are the ones which help them to achieve the objective of the project. Weaknesses obstruct one from achieving their objective like having administration challenges (Valanciene & Jegeleviciute, 2013). One can categorize crowdfunding into four platforms. Firstly, donation-based crowdfunding, here the investors donate the amount but do not expect any benefits in return. Secondly, rewards-based crowdfunding, here the investors donate the amount and receives some benefits in return. Thirdly, credit-based crowdfunding, here the investor loans the money which is usually in the form of a credit loan. Finally, equity-based crowdfunding, here the investor gets a return on his/her investment in exchange to the amount guaranteed (Colgren, 2014).
In recent days, scientists are considering crowdfunding as an option for their research investment as the funding rates from traditional sources dropped below 20%. Main element which contributes to successful science crowdfunding is developing a crowd, which determines that outreach is really important. “Social media outlets provide an easy platform to appeal to potential funders and to channel these individuals directly to a proposal online.” Such a type of crowdfunding model generates good relations between scientists and the public and this catches more diverse audiences when compared to other usually funded projects. On the other hand if the scientists do not participate in the outreach then this could lead to fewer groups of people towards donating (Wheat, Wang, Byrnes & Ranganathan, 2013).
Crowdfunding provides a...

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