Infancy has its problems. Yes, the charm of youth is compelling, and often truths emanate from the mouths of babes. But all that novelty can create a climate of uncertainty, and juvenile testimony is notorious unreliable.
So it is with the still-young word of crowdfunding and alternative finance. Witness the subtext of this Alison Coleman article in Forbes:
‘The World Bank forecast that global crowdfunding will reach $90 billion by 2020, though at the current growth rate, many believe this figure could be reached by 2017. Then you cast your mind back to Europe’s biggest Kickstarter project, the Zano mini-drone, that crashed and burned last year, leaving many of its 12,000 backers, who’d put in £2.3million ($3.5 million), with nothing, and the crowdfunding cynics saying ‘told you so’.
“The crowdfunding dichotomy is puzzling; mature enough to be considered almost mainstream, yet still fraught with risk, as highlighted by the Zano failure. Nevertheless, for many startups crowdfunding is still their best and possibly only hope of getting products to market.”
Some things are clearly true: there’s novelty and with it, growth in this world. Bt ok at that las phrase: “crowdfunding is still their best and possibly only hope of getting products to market”.
The case of Zano is project crowdfunding – often totally different from equity crowdfunding – and a million miles from the kind of peer-to-pee (P2P) business lending that Money&Co. does. For background on Zano, see this BBC article.
See our Knowledge Hub for a definition of crowdfunding and its sub-sectors.