The term Crowd funding refers to a collection of funds for any venture or project through various sources like equity and non-equity, the platform for collecting funds can be the internet and other social media. These crowd funding platforms help investors to meet entrepreneurs in need of funds for their ventures. Mostly, none- equity sector can be considered as the main source of crowd funding rather than equity sector. The crowd funding market had started in the early or mid of 2000’s, and since then it has noticed an enormous growth owing to the increase of Start-Ups and many new projects globally. Moreover, such crowd funding platforms have been able to collect billions of dollars for meeting millions of campaigns in the year 2012. Nowadays, Investors are getting attracted to such crowd funding market because of the potential of the untapped market in many regions. North America is having a greater potential in crowd funding market due to the presence of economically sound countries like the US in this region. Likewise, every year crowd funding platforms are launched, thus globalizing the crowd funding market.
The increase in a number of Start-Ups and many new small projects are responsible for the growth of crowd funding market for their capital needs. Moreover, Real Estate sector is growing with a significant rate in developing regions like North America, Europe and Asia Pacific. Hence, increasing fund requirement in Real Estate sector is a driving force for crowd funding market. In addition, this sector is having a good market share in crowd funding market.
Besides the driving factors of crowd funding market, there are many stringent conditions of crowd funding platforms which can restrain the crowd funding market in further future. Many entrepreneurs are not aware of the existence of crowd funding platforms which can hamper the growth of crowd funding market. Like “Kickstarter” launched a mission to empower artists and creative projects owners for their ideas through reward crowd funding, but due to lack of awareness many entrepreneurs were not able to avail the benefits of crowd funding.
On the basis of Sources: Non-Equity Sources, Equity Sources; On the basis of crowd funding platforms: Specialized platforms, Activity – Specific platform, General purpose platform; On the basis of allocation of funds: The All-or-Nothing model, The keep what you earn model.
The global Crowd Funding market is segmented into seven key regions as North America, Latin America, Western Europe, Eastern Europe, Asia-Pacific, Middle East and Africa and Japan. North America is having the maximum market share in the global crowd funding market, specially the US in this region is having a big chunk in crowd funding market because of its higher economy than other countries. North America is followed by Europe in crowd funding market and in Europe also, the best performing countries are UK and France. Asia Pacific is anticipated to witness a moderate growth in crowd funding market due to many new business opportunities in various sectors.
The key players in crowd funding market, which are having their websites as the crowd funding platforms are as follows: Crowd Cube Capital Ltd., Seedrs Limited., Kickstarter PBC., Indiegogo, Inc., GoFundMe, Fundable LLC., CircleUp Network, Inc., MicroVentures Marketplace, Inc.
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