Entrepreneurial business ventures require resources to succeed, and one of the most critical of these is finance. Yet it is well recognised that both domestically and internationally focused business ventures face difficulties in attracting external finance, especially in the early part of their life cycles. Some of the most common traditional options for seed capital are through banks, business angels or venture capitalists. However, with the significant decrease in access to capital from these sources since the financial crisis of 2008, entrepreneurs are being continually challenged in their ability to find seed capital. Many remain unfunded, partially because of a lack of sufficient value that can be pledged to funders, and partially because of unsuccessful attempts to both find and convince funders. Crowdfunding therefore has become of great importance to entrepreneurs to fund new venture creation, new product development, marketing and internationalisation. This chapter describes the main crowdfunding models and platforms, the associated regulations and risks, key crowdfunding campaign considerations as well as an overview of the key antecedents to and consequences of crowdfunding for entrepreneurs. The successful Brewbot crowdfunding case is presented as a desirable model.
|Title of host publication||Handbook of Entrepreneurship and Marketing|
|Editors||Nicholas Telford, Ian Fillis|
|Place of Publication||UK|
|Publisher||Edward Elgar Publishing|
|Number of pages||16|
|Publication status||Accepted/In press - 20 Apr 2020|
- crowdfunding; entrepreneurial behaviour, alternative financing, financial innovation, crowdfunding platforms
Ramsey, E., Gallagher, E., Kincaid, A., & Loane, S. (Accepted/In press). Far from a madding crowd: crowdfunding possibilities and pitfalls. In N. Telford, & I. Fillis (Eds.), Handbook of Entrepreneurship and Marketing (pp. 148-164). UK: Edward Elgar Publishing.