Category: Economics (Page 1 of 50)

Extant literature on entrepreneurial activities by companies evidences their significant role in economic growth, enhancing innovation, and creating jobs (Estrin et al., 2018, p.425-26). However, realizing the opportunities and benefits accrued from entrepreneurial activities may fail due to the lack of funding. Funding is the foundation on which every start-up thrives, without which it will fail. According to Garg and Shivam (2017, p.22), start-ups normally fail because they run out of capital, experience working impediments resulting from demographic or bureaucratic reasons, the lack of resources, or the failure to meet targets. Either way, funding plays a critical role as a determinant of success or failure of a business, which is why entrepreneurs need to evaluate underlying issues that would cause the start-up to fail so that they can effectively manage their funding. The same applies to lenders as they determine whether they are making meaningful investments and whether the start-ups will effectively and efficiently utilize the finance provided to ensure sustainable growth. It is especially critical for start-ups in the early stages of growth as they struggle to demonstrate their legitimacy into transitioning from conceptualization to commercialization (Islam et al., 2018, p.36). The current report discusses early-stage funding using crowdfunding and why it would be the most appropriate funding strategy for the business. It does so by establishing the strategies used by lenders to invest, the value it will have on the business, and why it is more appealing than other funding sources.