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Irfan Khan

Posted 18/05/2016 16:22:02

Is crowdfunding a new concept?

Putting it simply, in my opinion “absolutely not” this statement might cause a stir in the FinTech community, but let me explain myself further and qualify my statement.

In the previous post we discussed what crowdfunding is, but many of you might have been thinking, well I can do this with a group of friends, or may know of people who collaborate with others to pool resources together to further their investment options. Well, this is a form of crowdfunding, its probably a micro-crowd but still crowdfunding nonetheless.

So crowdfunding has been around in one form or another for centuries, but what makes it so different now….. well that’s the key question here!

Let’s introduce Hazel, a business woman who has some great business opportunities presented to her. However, she is slightly restricted with pursuing these opportunities due to lack of capital. Additionally, Hazels network of friends and potential investors are also limited. Its apparent that Hazels micro-crowd will not be a suitable fit for her to access the funds she requires to pursue her business opportunities.

Now this is where crowdfunding plays a role; the traditional sense of using a micro-crowd is not suitable, but the wider crowd (macro-crowd) comes in and shares the same appetite for the business ventures and supplies funding to Hazel to pursue the business venture.

Therefore, if we refer to crowdfunding in the wider crowdfunding sense or macro-crowdfunding, then its absolutely a NEW phenomenon, and is revolutionising the way people like Hazel can access investment.

What once could have been restricted to a few investors, is now made available to a new generation of investors that are accessed through online portals.


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