Lack of information and knowledge about alternative source of business finance has hindered growth among startups and entrepreneurs. Many small businesses are still hanging on to the traditional belief that only banks can facilitate business finance. A report by Experian (Credit Agency) confirmed that many small business owners are yet to know that they can secure business finance through other sources.
The power of the internet to harness and pull resources and information from likeminded people has facilitated the generation of creative and alternative means of raising finance for just any venture.
Crowdfunding is one of such alternative means of raising finance from the crowd. The internet has made geographical locations irrelevant because it created a global paying ground where people connect virtually to collaborate, interact and invest.
I am a big proponent of crowdfunding because of the ability of entrepreneurs and small businesses to have access to capital which they need to turn their ideas into a reality. It means that just anyone, anywhere can have the same opportunity to raise funds and likewise anyone anywhere can make a personal decision to support worthy projects.
There are without doubt some challenges in crowdfunding but there are indications that crowdfunding platforms and industry regulators are developing approaches to mitigate those challenges. Sophisticated and traditional investors are beginning to participate in crowdfunding. That is an indication that crowdfunding is not an option to be ignored.