SOURCES OF EXTERNAL FINANCE - Crowdfunding

Crowdfunding - raises finance by inviting lots of people to lend small sums of money via web sites listing businesses seeking loans.

The business uses the internet to explain how much money is required, how it will be used and the exit strategy stating predicted return on the investment.

The investor is only tied into their contribution if the total amount is raised.

ADVANTAGES OF CROWDFUDNING
  • Millions of potential funders can be reached all over the world.
DISADVANTAGES OF CROWDFUNDING
  • No guarantee that Crowdfunding will raise sufficient finance
BEST FOR ...  Unusual ideas and projects that might not attract other forms of finance.

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