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Crowdfunding : The Way Ahead Essay

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Crowdfunding: The Way Ahead Renowned author, J.K. Rowling, mentioned in her highly acclaimed Harry Potter series, “We are only as strong as we are united, as weak as we are divided.” Nothing can be further from the truth of this statement. This is exceptionally true in the aspect of crowdfunding – the financing of a project or a venture by a group of individuals instead of professional parties (Larralde & Schwienbacher, 2010, p. 4). One of the biggest challenges of many start-up companies is funding, more specifically the seed capital. Countless number of great ideas have been abandoned simply because the entrepreneurs were unable to obtain their seed money to kick off their project. With this new phenomenon of crowdfunding, brilliant ideas now have a platform to attain the necessary funding for them to be launched to the public. Kickstarter, one of the largest crowdfunding sites, currently covers US$237 million in funding pledges to over 40,000 projects (Mollick, 2014). This figure is only expected to rise in the coming years. However, this is not merely a one-time success; there has also been proof of the sustainable success of crowdfunding. Out of the fifty highest funded projects through 2013 on Kickstarter, 45 have turned into ongoing entrepreneurial firms (Mollick, 2014). New businesses now can have more alternatives other than the traditional sources of venture investment and financing. The diversity of projects funded by crowdfunding is astounding, ranging from

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