Equity Financing of Start-Ups : an Analysis of Sources with a Focus on Crowdfunding
Robbers, Alina (2020)
Robbers, Alina
2020
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2020122930035
https://urn.fi/URN:NBN:fi:amk-2020122930035
Tiivistelmä
This paper addresses the question if crowdfunding is a suitable tool to
equity finance start-ups. The entire alternative finance market is growing.
Especially Europe is a big market containing 38 percent of the world’s
alternative finance industry. Within this industry, crowdfunding is its most
significant segment with a global turnover of US-Dollar (USD) 5.8 billion
as of 2019 (Statista, 2020a, p. 4).
During the last couple of years, crowdfunding has experienced a
remarkable development and grew into a worldwide highly recognized
several billion-dollar-market. Websites and portals offering finance
through crowdfunding identified the funding gap for small businesses in
terms of classical bank finance and directly stepped up to fill in this market
niche (Cumming & Hornuf, 2018a, pp. 1-2).
Finding an appropriate funding source that aligns with the strategic goals
of companies is of tremendous importance (Volkmann et al., 2010, p. 289).
In literature, experts say that, especially for start-ups in early phases,
crowdfunding can be a great option since they are typically the companies
having a hard time receiving funding. The funding gap is still present, and
because banks are mostly not willing to take the risks of funding start-ups,
most of them are only left with equity funding options (Cunningham,
2016, p. 38).
equity finance start-ups. The entire alternative finance market is growing.
Especially Europe is a big market containing 38 percent of the world’s
alternative finance industry. Within this industry, crowdfunding is its most
significant segment with a global turnover of US-Dollar (USD) 5.8 billion
as of 2019 (Statista, 2020a, p. 4).
During the last couple of years, crowdfunding has experienced a
remarkable development and grew into a worldwide highly recognized
several billion-dollar-market. Websites and portals offering finance
through crowdfunding identified the funding gap for small businesses in
terms of classical bank finance and directly stepped up to fill in this market
niche (Cumming & Hornuf, 2018a, pp. 1-2).
Finding an appropriate funding source that aligns with the strategic goals
of companies is of tremendous importance (Volkmann et al., 2010, p. 289).
In literature, experts say that, especially for start-ups in early phases,
crowdfunding can be a great option since they are typically the companies
having a hard time receiving funding. The funding gap is still present, and
because banks are mostly not willing to take the risks of funding start-ups,
most of them are only left with equity funding options (Cunningham,
2016, p. 38).