Apr 2014 Speaker - Crowd Funding

Crowd Funding (also known as Microfinancing) -

this is a way of requesting funding for a project on-line. If lots of small investors like your idea their accumulated money power can enable projects to flourish.

Judge Business School, Cambridge.

Gonzalo, a past student of the Business School, gave us a very succinct description of how Crowd Funding works. He maintains that in the future it will be a widely used way to fund entrepreneurial projects. 

He has designed an ethical, well regulated platform on-line that is registered with the FSA.  It facilitiates the request from a project for funding, then combines all the offers for that funding.  Only if the total amount of funding is found will any money change hands, direct from the investor to the business.  The platform is funded from a 5% levy asked from the businesses involved. Projects are only accepted if a Business Angel can be found to put at least 25% of the total in to the pot. All investors of every size get shares in the project on the same basis.  Money can be realised if the business is sold or if it is successful enough to launch on the Stock Market.

The first example of a Crowd Funded project that he has found was the base of the Statue of Liberty - it took 5 months to raise more than $100,000 in 1885 - so it can be a very successful method of finding funding. It does mean that anyone can invest money, not just those with a lot of capital. He warns that no one should invest in anything with money they cannot afford to lose, as some businesses are sucessful while some fail badly.

The same principle is Lend with Care - micro loans from the west can provide life changing start up money for businesses in the Third World.  The stake is then repaid and can then be reinvested to help someone else.

www.lendwithcare.org/