The first equity crowdfunding websites were only set up four years ago, but since then the sector has grown phenomenally: from 2012-14, in the UK alone equity crowdfunding grew by 410% (you can read more about this in our introduction to the poll)

Fox, Mary

LSE Research Online

7/7/2017 Poll results: Is Crowdfunding a Fad? | LSE Entrepreneurshiphttp://blogs.lse.ac.uk/entrepreneurship/2015/03/24/poll-results-is-crowdfunding-a-fad/ 1/4Poll results: Is Crowdfunding a Fad?The first equity crowdfunding websites were only set up four years ago, but since then the sector hasgrown phenomenally: from 2012-14, in the UK alone equity crowdfunding grew by 410% (you canread more about this in our introduction to the poll).However, many of the factors that have driven this growth feel very specific to the last few years: itrequires well-developed and widely used social technologies; the prolonged recession has boostedboth the appeal of alternative finance (no more banks, thank you) and the uptake of non-traditionalcareer routes; and its democratic ethos is clearly in keeping with the rise of the sharing economy.This raises the question of whether the growth of crowdfunding represents a significant andpermanent shift in the funding landscape, or whether its star will wane as these other factors change.We asked ‘Is crowdfunding a fad?’“No”The answer from our voters was a resounding ‘no’. Only 19% think crowdfunding is a temporary fad;the remaining 81% are more positive about its future.Once again we canvassed some experts for their thoughts on the question, and they were of thesame mind. Here’s what they said: Mary Fox, Co-Founder and Managing Director of Olivemonday, andauthor of January’s post Protecting the Future of Equity Crowdfunding,says it’s not a fad, but that the future isn’t plain sailing either:While technology has enabled crowdfunding to morph and grow significantlyover the past five years, it is by no means a new concept and most certainlynot a fad. In fact, the base of the Statue of Liberty was collectively funded (i.e.,crowdfunded) by more than 160,000 donors in the late 19th Century. Thatbeing said, there are various forms of crowdfunding, and some will likelywithstand the test of time more than others.We are seeing an increase in the number of crowdfunding platforms that provide the opportunity forindividuals to raise money for a specific cause with nothing in return. Patreon.com is such a platformwhich enables artists to raise funds to support their work. Funders receive nothing tangible in return,as the art that they are supporting is already freely accessible via the internet. It is likely that the gift-for-service model is here to stay.Equity crowdfunding, a significantly different form of crowdfunding from that of Kickstarter or Patreon,may have a bleaker future but I am reluctant to call it a fad. A fad implies that something will go out ofstyle, and I don’t believe equity crowdfunding will fade on its own. It may, however, be overregulatedto the point of no return.Equity crowdfunding fills a very real funding gap and there is a growing market for it. At the moment,its fate in the U.S. rests in the hands of regulators who have a strong fear of the unknown. It ispossible that we will see equity crowdfunding fail in the next two to three years and then reappear a7/7/2017 Poll results: Is Crowdfunding a Fad? | LSE Entrepreneurshiphttp://blogs.lse.ac.uk/entrepreneurship/2015/03/24/poll-results-is-crowdfunding-a-fad/ 2/4decade later as the U.S. becomes slightly less risk averse to this alternative form of funding. A morelikely scenario is that we will see equity crowdfunding thrive in the United Kingdom for the next fewyears, to the point where U.S. regulators are more comfortable to loosen regulations and join in onthe fun. Amir Deng is an entrepreneur and graduate of LSE’s International Relationsdepartment. In the day, she can be found undertaking a graduate internshipwith the Widening Participation Team and in the evenings you’ll find hersunning in entrepreneurial goodness, embracing London’s vibrant startupcommunity.At a recent crowdfunding event organised by Runway East she put thequestion to the panellists. Unsurprisingly, this group is also fairly adamantthat crowdfunding is here to stay:Emma Northcott, Business Development Specialist, Crowdcube7/7/2017 Poll results: Is Crowdfunding a Fad? | LSE Entrepreneurshiphttp://blogs.lse.ac.uk/entrepreneurship/2015/03/24/poll-results-is-crowdfunding-a-fad/ 3/4Anthony Eskinazi, Founder of JustParkAlex Stephany, CEO, Just Park7/7/2017 Poll results: Is Crowdfunding a Fad? | LSE Entrepreneurshiphttp://blogs.lse.ac.uk/entrepreneurship/2015/03/24/poll-results-is-crowdfunding-a-fad/ 4/4March 24th, 2015 | Crowdfunding, Featured, Poll | 0 CommentsAlex Hoye, angel investor and co-founder of Runway East Featured image credit: Ana Paula Hirama https://www.flickr.com/photos/anapaulahrm/

Poll results: Is crowdfunding a fad?

Abstract

Similar works

Full text

Available Versions

LSE Research Online