Crowdfunding - Statistics & Facts

Crowdfunding - Statistics & Facts

Statistics and facts about crowdfunding

Crowdfunding is the collective effort of a large number of individuals who network and pool small amounts of capital to finance a new or existing business venture. Each campaign is set for a goal amount of money and a fixed timeframe, each day is counted down and the money raised will be tallied up for visitors to follow its success. The number of crowdfunding platforms worldwide is on the increase and although the main markets remain in the United States and the United Kingdom, the steady percentage growth in crowdfunding platforms worldwide show that this may not remain the status quo.

The current financial climate has, according to some, given rise to the culture of crowdfunding. The stringent post-recession lending policies perused by banks and the resulting difficulties experienced by small businesses to get credit have compelled people to seek means of alternative lending as a way of sidestepping bank loans.

Many contributions to crowdfunding initiatives are donation-based, meaning that investors pledge money without expecting anything in return. It is easy to see the virtue in donation-based crowdfunding but experts often question the share-selling model, often charging that ventures in this category are too high-risk and often destined to fail. As is the nature of equity markets, going against the market, i.e. buying low and selling high is the only way to see a decent return on your investment, following the crowd is not always a wise decision.

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