Advantages And Disadvantages Of Crowdfunding

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Literature review This chapter will explore the literature of both crowdfunding, more specific, equity crowdfunindg and marketing communication campaign, and eventually on the cross road of both topics, which exactly is the key topic of this study. First, the literature areas related to entrepreneurial financing includes bootstrapping, angel finance, bank loans public support, VC and private equity. These aspects all can be helpful in explaining crowdfunding. The amount of literature is enormous, but this paper will directly look at the crowdfuning, more specifically into the equity crowdfunding. Crowdfunding Crowdfunding can be easily explained as raising money or other format of funding from the general public for a business activity, projects, or small-medium-sized ventures that looking for a growth. The crowd can be understand as a…show more content…
Griffin (2012) stated that crowdfunding is like posting classified advertisement on a website, through which entrepreneurs can also advertise a business concept and idea and reqire for funding from the “ crowd”. Types: Why crowdfunding? Importance and advantages and disadvantages Advantages of Crowdfunding Crowdfunding is being seen as not just a source of capital raising, but also as a mode of validation fo the entrepreneur’s business idea since it provide projection of target market. (Manchanda & Muralidharan, 2014) Equity crowdfunidng Connelly et al (2011) pointed out that potential investors evaluate the unobservable characteristics of ventures by translating the signals sent by entrepreneurs and possibly also indicators characterizing company attributes. The level of uncertainty This chart shows the differing levels of complexity and uncertainty over donation crowdfudnign, reward-based crowdfunding, lending crowdfunding and equity crowfunding. As it shown that equity crowdfunding is the most complex from both legal point of view and with respect to information asymmetries (Hemer,
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