Partner Article

Crowdfunding: the future of investment

Each generation brings a new form of fundraising to revolutionise the way startups and businesses obtain financial capital to get their businesses going, from private equity and venture capital to business angels, funding from banks, friends and family.

Now, a new era has begun, with the free-flow of information through the internet, enabling sites like Crowdcube and Kickstarter to revolutionise the way entrepreneurs finance their ventures.

Recently I’ve seen many more crowdfunding stories crop up, from ex-York City football player David McGurk to Sheffield organic firm Nathalie Bond, and I want to see more of it in Yorkshire.

Arguments against crowdfunding, the loss of interaction and face-to-face contact with investors damages accountability, the multitude of ventures leading to a sort of investors fatigue and the higher chance of fraud are things to be aware of when considering investing, but being savvy and asking the right questions can counteract this.

Basically, crowdfunding is brilliant. It turns investing from a case of the rich get richer to thesmart get richer - those that can enhance the digital marketplace and use it to their advantage have the upper hand, and in an increasingly digital age, this awareness is crucial.

It also means that everyday people, who previously couldn’t afford to invest hundreds of thousands or even millions into a project they believe in, now have the chance to do so.

This taps into a whole new potential stream of revenue for a company, and with more investors comes (one hopes) less risk. One investor pulling out will not crash the entire idea into the ground. I can’t wait to see more of it.

For some more advice on the pros and cons and how to invest on a crowdfunding site, Forbes has done a very succinct guide here.

This was posted in Bdaily's Members' News section by Clare Burnett .