Introduction New technological advancement has led to the emergence of many innovations in the field of business. Most often, individuals or groups coming up with these ideas and innovations do not have enough funding of their projects and businesses. Such situations drive them to search for better lending and funding bodies to accomplish the set objectives. They may acquire funding through bank loans, family members, partnership, business, venture capital firms and grants and other funding bodies. Most start-up businesses may face financial crisis or may desire to expand to meet their consumer demands that require funding to continue with their operations and expansion. This research seeks to whether enterprises, specifically start-up businesses, can rely on crowd-funding as a substitute for venture capital firms. Crowd funding is where individuals form a network that raises the expected amount to learn a business in a business enterprise. This type of funding is common in funding projects such as disaster management and control, funding political campaigns, scientific research and supporting the art industry. The theories applied in such projects may be used in a business environment where the equity is sold to many investors. These individual investors benefit through payment of dividends as shareholders of the project. This research paper will evaluate on whether individuals can be willing to invest their finances in a start-up business to earn a share of a business equity. 1.1 Hypotheses The author hypothesizes that crowd funding would be a viable alternative source of capital if the general public has the ability to raise enough money and they are willing to give it to entrepreneurs who are starting businesses in exchange... ... middle of paper ... ...owdsourcing.org, 2012. DeMaria, Scot Steinsburg & Russel. The Crowd Funding Bible. READ.ME, 2012. GPO . "One Hundred Twelfth Congress of the United States of America." Authenticated US Government Information. Washington: United States Government printing Office, 2012. 22. Hastings, Paul. "Demystifying the Recently Enacted crowd funding and private offering reforms." Stay Current. April 2012. https://www.secondmarket.com/discover/wp-content/uploads/2012/01/Stay-Current-Demystifying-the-Recently-Enacted-Reforms-Paul-Hastings.pdf (accessed August 19, 2012). Zider, Bob. "How venture capitakl works." December 1998. https://notes.utk.edu/units/biz/macc/MAccCal.nsf/0/36abe202e19e223e852571370060c1a7/$FILE/Venture_Capital_Overview.pdf (accessed 8 18, 2012). Idaho S.B.D.C ( Small business development center). “Business start-up guide.” Boise. Boise state university, 2011.
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... Crowdfunding is based on quality and innovation, not on profit. A project needs to catch enough interest in order to be realized. This forces innovative architectural concepts. Conclusion The new mechanism = the crowd instead of the old centralized organizations plus the new driver = the quality instead of profit eventually leads to a new highly participatory society redefining our own relationship to the environment.
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Social finance is seen as an approach aimed as mobilizing private capital in order to ensure the delivery of economic returns and social dividends to attain environmental and social goals (2). It also creates many opportunities for various investors to finance certain projects to benefit community and society organizations to access other sources of funds. The description of the policy issue, as social finance, is conveyed by the implementers who involve mainly political leaders, interest groups, state legislatures, congress, and government bureaucracies. The problem from the policy is defined based on the economic situation of the society before its introduction and implementation. Social finance, as an initiative, is a form of a business with the aim of bettering society economically and having a positive social impact such as creating new job opportunities and funding business development programs. Since 2004, over $67.7 million has been invested in over 7300 businesses and community development projects (3). The description of the problem also involves understanding of the situation in the absence of the initiative. The policy, as a problem,...
The case study is about an interview, conducted to four venture capitalists from four of the most prominent VC Silicon Valley firms, Kleiner Perkins Caufield & Byers (KPCB), Menlo Ventures, Trinity Ventures and Alta Partners. These firms invest both in seed as well as in later-stage companies, which operate mostly in the information technology sector. However, each VC has developed different sector portfolio depending on the expertise of the venture capitalists, the partner network and other factors. Professor Mike Roberts and Lauren Barley a senior research associate, both from Harvard Business School, have made a series of seven questions to their interviewees to understand how they evaluate potential venture opportunities and what they look at in order to decide if they will fund them and in which way. The questions were dealing with how VC’s evaluate potential venture opportunities, how they conduct due diligence, what process id followed for the decision making, what financial analyses is performed, the role of risk in the evaluation and how they think of potential exit routes. These questions were asked individually and revealed several similarities as well as differences in the strategy and the criteria that are used for the evaluation.
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Although small businesses do not make a lot of major deals with large investors, most small businesses create profit revenue greater than large corporations. Small business creators are very brave considering only ten percent of small businesses survive. Unfortunately, some communities do not support local small businesses; they only support the large brand name and force small businesses to die out. Since small businesses will not have a name brand known around the world, many people from communities will not support them because they are not known on a national scale. “This, in turn will affect the local economy and drive capital out of their local economy. On average, for every one hundred dollars spent in an economy, if spent on a
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Before 1980 the only way to find the investment for any startups was banks and in 1980's there were investors who were interested in technology business. In this 20th century, small and mid-sized enterprises (SMEs) have a low income and are not easy to get capital or financing from any financial institutions or bankers, but startups have an option to find their investments through a strategy called Crowdfunding, a venture to raise money from various people. This review infers the content on influence of crowdfunding in small and mid-sized enterprises (SMEs). This review emphasis on how crowdfunding is growing in SMEs, what are advantages and disadvantages of crowdfunding and a case study on how a company from Indonesia raised their money using crowdfunding.
Research on the Sources of Finance for a Business Firms sometimes need to raise finance for Working Capital and Capital Expenditure. Explain what each is and give examples. · Working Capital (or Revenue Expenditure) The working capital is made up of the current assets net of the current liabilities. It is vital to a business to have sufficient working capital to meet all its requirements. Many businesses have gone under, not because they were unprofitable, but because they suffered from shortages of working capital.
Studying Banking and Finance at University of St.Gallen will help me further increase my proficiency in corporate finance and financial markets. The in-depth research of specific topics, as well as a comprehensive curriculum, is a possibility for me to focus on my topic of interest – the mechanisms and institutions involved in providing venture capital and identifying angel investors as means to encourage innovation.... ... middle of paper ... ...