Crowd Funding – Entrepreneurial Finance for Participative Sustainable Development: Concept, Functioning and Challenges

Abstract

Crowdfunding is a revolutionary and transformative alternative method of financing small businesses. It is an alternative financial mechanism involving the pooling of resources by several people including the general public. A wide range of not-for-profit entrepreneurial ventures have emerged as viable and alternative options in the entrepreneurial ecosystem. It is a non-traditional method of generating money using social media platforms like Facebook, LinkedIn and various other social media sites which have created significant interest among people who are keen on community and contribution-based crowdfunding. Crowdfunding not only enhances digital financial inclusion but also supports environmental sustainability and encourages financial innovation. As a source of micro-financing, it serves as a support and supplementary system for fundraising and enhances social capital through collaborative resource mobilisation. It is an effective alternative to traditional institutional finance, avoiding excessive interference of regulatory bodies and restrictions, which often acts as irritants. The present research, using available literature and empirical data, attempts a scholarly introspection into the concept of crowdfunding. Through theoretical literature, we will look into emerging concerns and challenges that this mode of financing presently is facing. This paper provides a possible road map for future research while investigating the prevalence of crowdfunding in a developing country like India. This study will help potential investors, organisations and entrepreneurs to gain valuable insights into various aspects of crowdfunding and how it can be mobilized and utilized through online platforms. This paper also looks at how social resources could be used for creative or artistic pursuits and businesses that centre around community development. Crowd funding can become a major contributor to sustainable development and can lead to better utilisation of funds which would otherwise remain idle. Much remains to be done in India in terms of research on crowdfunding and its impact on social-economic development of the nation. This is a modest attempt to introduce the idea, initiate discussion and create a platform for scholars to take it further in these emerging areas. Crowdfunding isn't very popular in India yet, but it's time to promote it as an important way to fund socially positive initiatives for those who have resources and want to support and involve in such socially relevant endeavours.