CR OWD F U N D IN G

DI S AD V AN T AG E S
ADVANTAGES &
N B Y: A M IN A IS S A K A
PRESENTATIO T
E NER A L M A NA G EM E N
MBA-G
DEFINITION OF CROWDFUNDING

Crowdfunding is the process of obtaining financial support

for an initiative or project from a large number of individuals
in the form of individual contributions of a relatively modest
sum, most often via the use of the internet.
 EXAMPLE

Crowdfunding is exemplified by websites

like GoFundMe. Although GoFundMe is
most known as a crowdfunding site for
charity causes, it can also be useful for
commercial endeavors. That's a fantastic
choice for corporations and nonprofits
with community service programs.
HOW DOES CROWDFUNDING WORKS?

Crowdfunding is a way to raise money for your company from a large

number of individuals at once. In exchange, you will send them
something from your company. Crowdfunding allows you to gather
money from a large group of people by appealing to their generosity in
small increments.
ADVANTAGES OF CROWDFUNDING
Reduction of financial risks. Crowdfunding lets you test product demand. If you
want to establish a new brand of product in your neighbourhood, you could seek to
crowdfund it before buying ingredients and equipment.

It's a great alternative for seeking bank loans. Banks and credit unions don't
.
lend to many small companies. You need two years in business to build credit. If
you've been rejected a loan, consider crowdfunding.

You may obtain comments and professional advice on how to enhance your
concept by sharing it.
DISADVANTAGES OF CROWDFUNDING
Not all projects that apply to crowdfunding sites are accepted.

If you don't accomplish your financing goal, any promised money will be refunded
to your investors.

Failed ventures may harm your business's brand and donors' trust.