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It is no secret that as a society, we are quickly losing faith in the banking system. As technology continues to grow, there is a fast approaching sub-sector in alternative finance that could provide us with a solution. Crowdfunding platforms have completely transformed how we approach business through the medium of new technology. The good news doesn’t stop there.

Crowdfunding is just the tip of the iceberg in terms of the new industry norm, especially when it comes to finance. In the UK in 2014, equity-based crowdfunding grew by 420%. Because of its recent boom, many now ask whether crowdfunding is trustworthy, and if so, can it pick up the slack of the banks?

An attractive alternative to banking, this thriving industry has not yet reached its full potential. As more and more companies use crowdfunding as a fundraising opportunity, digital platforms continue to grow, offering companies an attractive and already popular resource. The UKCFA recently reported that, “The European online alternative finance market grew by 144% last year to nearly 3bn euros and could top 7bn euros in 2015.  The UK is by far the largest European country for alternative finance at 2.34bn euros (£1.78bn) in 2014.”

Small and large companies both thrive from crowdfunding because it gives the public a degree of control over what makes it onto the public market and what does not. It has particularly changed the way we view bank loans. As banks continue to let individuals and small companies down, there is now a shift in how we view the role of lenders. More so than ever before, we realise a financing system can indeed be built by and for the people. Highly decentralised and equal in its prospects, crowdfunding is that financing system.

In the near future, crowdfunding will surely replace lenders, as more people realize the success of this new financial platform.

The Millennial generation is increasingly interested in crowdfunding, an alternative financing system that allows members of the public to invest in a pitch before its completion. Many small companies have already caught onto this trend, and are using digital platforms to fund start-up and independent projects. However, crowdfunding isn’t just about getting a project completed. It opens avenues for large and small companies alike, allowing them to source new customers, market products and pre-order sales. It seems that when crowdfunding is involved, everyone gains.

Crowdfunding was originally conceived to support the financing of small companies. It offers an enticing alternative to companies who are looking to think outside of the box, while attracting a younger and Internet savvy crowd. The adoption of crowdfunding has the potential to completely change the current workplace. As technologies continue to develop, the digital skills acquired by young Millennials contribute to their advantage. According to Telefonica UK Chief Executive Ronan Dunne, by 2025, 75% of the UK workforce will be made of Millennials. As the baby boom generation slowly fades out, Millennials will carry the key workforce.

There are several reasons to adopt an alternative financing system such as crowdfunding. The Millennials’ jaded perception of the current system, predominantly its commercialisation, acts as a major incentive.  Many view larger scale marketing processes as artificial and insincere; something that the personal nature of crowdfunding attacks head on.

Crowdfunding platforms allow individuals, small companies and larger corporations to run a campaign that offers a transparent story: connecting suppliers to consumers, and companies to their backers. Potential backers can contact companies directly through crowdfunding platforms to ask questions about the project and ensure they are investing their money in a worthwhile company. For Millennials, this connection is very important. 30% of Millennials believe they will not need a bank account in the next fifteen years. Not only is this due to a loss of faith in the current banking system, but also a belief in alternative financing. They are counting on alternative finance to overhaul the banking system.

The digital revolution has allowed individuals and small companies to be innovative in completely new ways, from mobile devices and operating ecosystems to social media. Crowdfunding platforms not only provide financial support for those who need it, but they encourage a community of followers too. By engaging with people who will potentially become your backers, you can listen to their comments and receive helpful feedback to continue to expand and grow your company. Like we’ve said, when crowdfunding is involved, everyone gains.