Crowdfunding and Venture Success – An approach Study for Increasing Success in the Crowdfunding Method for Businesses

Topic 

Crowdfunding and Venture Success – An approach Study for Increasing Success in the Crowdfunding Method for Businesses

Instructions 

Write a literature review on Crowdfunding and Venture Success – An approach Study for Increasing Success in the Crowdfunding Method for Businesses

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Schwienbacher and Larralde (2010) offered one of the first descriptions of crowdfunding, referring crowdfunding as an alternative to the traditional sourcing of venture capital. The authors defined crowdfunding as the process or model of requesting for and raising capital from many individual (crowd) with a promise of some form of reward such as an equity, or future products (Schwienbacher and Larralde, 2010). Unlike the conventional methods of raising venture capital, crowdfunding involves some form of collection of smaller amounts from multiple sources, making it less bureaucratic for smaller firms. The concept of crowdfunding typically leverages the internet to reach out to a large number of potential supporters, whereby the venture owners can target the funders based on their business concept and target (Liu, H. and Wang, 2018).  On this note, a research by Liu and Wang (2018) examines and compares crowdfunding and venture capital as practiced conventionally, and conclude that crowdfunding is associated with more advantages due to its ability to help start-up firms obtain more accurate market demand information in terms of new products, their demand, when compared with venture capital. The entrepreneurs can learn whether their product is wanted in the market besides gaining the capital they are looking for.

Word Count: 2900