Crowd Funding Market in the UK - Report Example

Crowd Funding Market in the UK The External Environment The crowdfunding external environment includes its marketingwhereby it’s open to all and sundry. Crowdfunding raises funds for sports teams, individuals, community groups, charities, and businesses. To be successful in crowdfunding and receive the pledged monies, one is required to raise 100% of their target since the crowdfunding is a platform that is ‘all or nothing’. In order to engage their crowd individuals or businesses need a good idea. The projects of crowdfunding work fine when there are ideas that are attached or unique to a larger cause and ideas that are needed apparently. The individual or businesses first test their ideas with those close to them and ask if they would back it. Buysesre et al. (2012) stated that in the EU transparent and efficient markets currently cannot arise in equity field and crowdfunding loan because since regimes of investor protection are designed involvement setting that is incumbent which exclude crowd funder’s in large number. The marketing function of crowdfunding entails that businesses or individuals should know ten people who would pledge towards their project and help them turn their great idea into reality. In addition, they need those people to get their friends pledging by spreading the word, also they need to connect with communities who can help spread the word and who will be interested in their in their project. Besides, having rewards that are great for their Backers will facilitate the group they are not familiar with get drawn in with the project, and they will be pursued to pledge more. It is incredibly imperative to get off the zero mark early because the wider community of crowdfunding seeks to fund projects that are on the move. Threats timely apprehension allows appropriate measures to adoption so as to minimize or avoid their impact (Briciu et al., 2012). The second external environmental factor in crowdfunding is financial management and control. Owing to this, the crowdfunding average pledge is 50 Euros, so the individual or business should be looking to find an average of 200 Backers for every 10000 Euros for their project. In financial management and control, the Backers can pledge on a project via PayPal using their debit or credit card. If using PayPal their pledges are taken by crowdfunding straight away and deposited in the holding account. If the backed project is deemed successful crowdfunding transfers their pledge to the PayPal account of the project owner from the holding account. Ramsey (2012) implied that the crowdfunding action id the money raising process to assist turn ideas that are promoting into realities of business by connecting potential supporters with investors. The third external environmental factor of crowdfunding is Human Resource Policy. The crowdfunding is owned and operated by KEO PF. it Limited. Crowdfunding can be accessed by anyone. However, to make a pledge as a Backer or to become a project owner by posting a project one is required to register as a member of the community creating an account and assigning up. Individuals or businesses are not eligible to use crowdfunding if their access to the website was previously terminated or temporarily suspended and crowdfunding has not expressly authorized them in writing to resume using the website. In diverse fields, especially in the art, crowdfunding has become a fundraising mainstream method (Wheat et al., 2012) Even though the crowdfunder may agree from time to time to advertising and promote individual projects or assist to raise their project’s goals awareness, crowdfunding will not be involved in relation to a project nor will it fulfill or offer directly. Crowdfunding and grant giving market The three main opportunities for funding bodies that crowdfunding has identified are increase engagement of the community, unlocking and raising additional funds for projects, Build for projects a financial future that is sustainable. According to Lynn and Sabbagh (2012) the working based on crowdfunding is on the capability to pull money from individuals who have an interest that is common and are willing to provide contributions that are small towards the venture. Crowdfunding has three main forms: reward funding – This is whereby projects offer benefits in kind from their project or business in return for cash. Second is peer to peer lending – this is whereby the Backers provide funding to projects in return for interest on the loan. Lastly is Equity crowdfunding – this is whereby the projects in return for cash offer equity. Rewards are offered by the projects in return for pledges. It is a model of ‘all or nothing’. The money is released to the project when it hits its funding target. The money is returned if the target is not hit. In the UK, crowdfunding is growing fast, and it offers a solution that is complementary to other funding sources that are more traditional. Sulivan and Ma (2012) stated that lawyers’ point of view is revealed by a big part of the literature on crowdfunding that is available since legal changes are now being made. Due to lack of crowdfunding awareness and its benefits, funding bodies may not be maximizing the opportunities it unlocks which include: building a financial future that is sustainable for projects by embedding behavior that is entrepreneurial, secondly, increasing engagement of the community, with projects enjoying support that is greater and more recognition on the funding distributed, lastly, raising for projects additional funds from the private sector and the crowd. Crowdfunding can benefit projects such as private sector organization, public sector organization, or a charity with CRS requirement or brand communication. Crowdfunding having launched thousands of projects that have raised over 3 million Euros is the UK’s number one reward-based platform of crowdfunding. The typical assurance on a crowdfunding project is fifty Euros. The average reach of a crowdfunding project is 4000Euros. The average range of a project is 10000 people. Traditional funding bodies in the UK provide funds for 20% of crowdfunding submitted projects. Pick and Jourdan (2012) stated that the compliance costs would be reduced by this with national legislation and create a framework that is legal for fundraising that are particular across borders. Crowdfunding as a solution Crowdfunding is working already with numerous funding bodies with reference to how they are using crowd funding as their fund-giving process integral part and how they advise their projects on how to crowdfund. Crowdfunding is delivering campaigns and bespoke platforms to tackle challenges of funding and provide community funding that is outstanding and match funding solutions. For this reason, as a solution crowdfunding turns ideas that are great into reality by connecting communities. There is risk of ideas being stolen from entrepreneurs seeking to crowdfund their business by large corporation and investors (Garwin, 2012) accordingly as a solution; it is a way that is simple for individuals to support, raise money, and awareness for great ideas. Crowdfunding is about validation of individual’s and businesses ideas. It is all about advice, ensuring that all businesses that come through it is equipped with information and skills they oblige to turn out to be successful, and it is also teaching entrepreneurial behavior. How to reach In order to best reach its market and to introduce its products, crowdfunding uses the critical outreach tools that include personal email, which is the most effective; it is written in the first tier connection. Secondly, is the social media, it is the crowd funding marketing king. The social media beauty is not how much people can be reached but how many people through their network can share the crowd funding message. Social media is now an influence that is dominant in the corporate environment and affects even those who are aligned marginally (McDonald, 2014). Over the last year, Internet technology was used by 25% of adults in the UK to share funds and resources. Additionally, it has been discovered by crowdfunding that crowdfunding creates for its projects greater public awareness. Crowdfunding average project reaches 10000 people through word of mouth, PR, and social media. Crowdfunding via social media and also offline connects communities by uniting them for an everyday cause. Crowdfunding allows projects to get to out to their communities by using a combination of marketing and PR, traditional fundraiser techniques and social media. Unless there is capital, there will be no jobs and businesses, even though there may be entrepreneurs with ideas (Sacks, 2012). Competitors and partners Crowdfunding loves to work with partners who share their vision of using communities of crowd funding to make great ideas a reality. Crowdfunding partners include brands; it creates an association of the brand with a group of projects around a subject or region. Through projects and partners, crowdfunding has the potential to reach millions, raising an organization’s profile. Crowdfunding has also partnered with funding bodies to achieve for primary goals that include: Assisting organizations with adequate distribution of funds to build futures that are sustainable for their supported project, increased engagement of the community and raising for projects additional funds. Crowdfunding also partners with universities. Its campaigns are sponsored by universities to make grant innovations and ideas a reality by connecting the students and the staff with the university alongside the wider community, business, and the alumni. Crowdfunding also partners with corporate social responsibility. New forms of community that in the past were not imaginable have resulted from technology (Kolb, 2013).Other potential partners of crowdfunding include the local Authority, Financial partner/bank, charities, and the Local Enterprise Partnership. Crowdfunding is facing competition from sites such as Kickstarter and Indigogo, which are US based and from Sponsume, Spacehive, and Zequs which are UK based. Reflective individual analysis While doing this consultancy project, the task assigned generally ended up being successful. This was so because we established a successful working relationship, we gained each others complete participation in the project; we were able to recognize the most common types of problems that would occur while undertaking the project in terms of research. We generated specific recommendations to address all issues in the project. Howard (2013) states that its approach mode encompasses searching that is thorough coupled with realizing the ventures that are proposed online within their receipt shortest time. We developed complete actions plans that are integrated and aligned sufficiently for effectiveness and optimum implementation. We were able adequatelyto address resistance from some of the group members, and we ensured momentum and ongoing motivation during the project, as a team we also knew how to ask for help when needed. Moreover, we identified other expertise required to implement the project as well as when and where that expertise was to be used. Due to factors that are varied, some which we were unable to dictate and some under our control, not all things worked out as we had anticipated as a team. Those under our control entailed poorly defined responsibilities and roles, poor communication, cost and schedule overruns that included lack of project portfolio management and prioritization, lack of organizational support and lack of management commitment. Those that we could not detect entailed the use of unfamiliar tools. Initially, we attempted to utilize an unfamiliar tool at the same time our project was starting, this lead to problems that are severe during our projects life-cycle since has a team we had to contend with our common project duties while also dealing with new tool learning curve. Despite these factors, generally things worked out as we anticipated, we avoided the project by managing our goal and selected the correct methodology for our project, and finally, the team members managed to comply as necessitated. Initially, we underestimated certain aspects of the project since we thought that the task was an easy one. However, it emerged that the project was demanding since we needed knowledge and skills in how to conduct and plan a consultancy project. Powers (2012) argued that crowd funding viability depends on whether cost-effective rules and flexibility is implemented by the SEC to encourage intermediaries’ registration of crowd funding. We needed to understand the process of consultancy through how to initiate the consultancy project, how to conduct the project and how to implement and follow up the project. Secondly, the job demanded for the search and up to date information whereby we needed knowledge and skills in how to conduct and plan research in the main approaches to doing research in this area for instance, the job demanded techniques of data collection and analysis. Everything, including team members did not fall in place as we had calculated since their cooperativeness was short-lived due to the project’s complexity. In order to solve this as a team we dealt with the changing needs of the project. To remain active in such a complex project and improve internal process within the team, we needed to be able to learn our team learning referred to the process of knowledge and information between the members which resulted in a change in the range of the team’s potential behavior. In the process of the consulting project, I learned numerous things while working with the team that could be useful for me in the future. First looking at things from the others perspective increased my likelihood of quality innovation. Working with the team has created for me a support environment and has propelled me towards implementation. My team environment has boosted my individual confidence and has allowed me to do the best of my work in the future. Working with my team has made the most of my own talent. The more I have worked together with the team, the more I have learned and stopped away to become a better worker in my own job in the future. In the project, we learned that crowd funding will be people’s tool to invest in communities of their own which would help to create economic health that is sustainable (Kitchens and Terrence, 2012) So far, I have attained and developed skills essential for modern management and become an entrepreneurial and independent business leader with business analytics and problem-solving analytics approach. This skill and knowledge combined with my gained experience from my placement in doing consultancy project within the group will give me the best pad for launch of my business career. Through studies, I have so far attained and managed to use toolkit such as the research skills. The research skills toolkit that I have used in the project research include organizational and time management skills, using electronic and library skills, referencing and using information sources, possible effects and the plagiarism concept. The second toolkit that I used is the presentation that entailed planning the project’s presentation, timing, practicing, and checking for the performance, evaluating and delivering the presentation. In this project, I believe there were no any tools that held me up in delivering it as required. Given that this project entailed tabulating trend with charting and common graphing of the research entire performance. References Briciu, S., Capusneanu, S., Topor, D. (2012). Developments on SWOT analysis for costing methods. International Journal of Academic research, 4(4), p.145-153.http://dx.doi.org/10.7813/2075-4124.2012/4-4/B.2 Buysere, K., Gajda, O., Kleverlaan, R., Marom, D. (2012). A framework for European crowdfunding. Retrieved from: www.europecrowdfunding.org/Resources/Documents/FRAMEWORK_EU_ CROWDFUNDING.pdf Galwin, W.F. (2012). Comment on SEC Regulatory Initiatives Under the JOBS Act: Title III —Crowdfunding. Retrieved from www.sec.gov/comments/jobs-title-iii/jobs-title-iii.shtm. Pick, F., Jourdan, S. (2012). Crowdfunding leaders call for European legal framework. Retrieved from ouishare.net: http://ouishare.net/2012/11/crowdfunding-european-framework/ Howard, L. (2013). Crowdfunding site StartSomeGood opens in the UK. [Online] UKFundraising. Available at: [Accessed 1st April 2015] Kolb, B. M. 2013. Marketing for Cultural Organizations: New Strategies for Attracting Audiences - third edition. London: Routledge. Kitchens, R., Torrence, P. D. (2012). The JOBS Act – crowdfunding and beyond. Economic Development Journal, 4, 11, p.42-47. Lynn, D. M., Sabbagh, H. (2012). The JOBS Act opens door for crowdfunding offerings. Morrison & Forrester Social Media Newsletter, 2 (3), p.6-8. McDonald, G. 2014. Business Ethics: A Contemporary Approach. Powers, T. V. (2012). SEC regulation of crowdfunding intermediaries under Title III of the JOBS Act. Banking & Financial Services Policy Report, 10 (31), p.1-7. Ramsey, Y. A. (2012). What the heck is crowdfunding? Business people, November, p. 54-57. Sullivan, B., Ma, S. (2012). Crowdfunding: potential legal disaster waiting to happen. Retrieved from Forbes.com. Sacks, D. (2012). Shaking up crowdfunding. Fast company, 166, p.39-41. Sullivan, B., Ma, S. (2012). Crowdfunding: potential legal disaster waiting to happen. Retrieved from Forbes.com. Wheat, R. E., Wang, Y., Byrnes, J. E., Ranganathan, J. (2012). Raising money for scientific research through crowdfunding. Trends in Ecology and Evolution, 2 (28), p.71-72. Read More