Crowdfunding: An Alternative Method to Invest

Abstract

Crowdfunding platforms can be used by individuals both to launch fundraising campaigns and to invest their savings. Crowdfunding is a funding channel through which personal or professional projects of individuals and small businesses can be directly funded by a multitude of entities. The meeting between supply and demand takes place on online platforms that provide information on individual projects and manage the flows of money. Crowdfunding is an alternative financing channel to that represented by banks or other financial intermediaries. The actual financing of a project, in fact, does not depend on the evaluation made by a single intermediary based on its own financing strategies but on the ability of the proponents to convince a sufficient number of investors to risk their funds in direct support of the initiative.