Will crowd-funding evolve as a popular funding option for startups?

In my view, crowd funding will continue to evolve. And perhaps someday become a significant asset class for people with a little bit of cash, which they are willing to play around with in a high-risk – high-return investment.

For crowd-funding to mature and become a popular investment option, there will have to a greater awareness of entrepreneurship and that the only way the game can be played is to invest in many, of which only a few would survive and may be one or two would give you disproportionate returns that justify the investment.

As investors start getting more aware and accepting of the failure rates, crowd-funding will start getting wider acceptance.

I do not agree with some comments that a few early successes will drive the growth of crowd-funding. At least I hope that a few early-successes are not the reason for many people jumping in to fund through crowd-funding platforms. Because there will be more failures than successes in startups. Investing in startups because you missed a few success stories is almost always the wrong reason to invest in startups.

Author: Prajakt Raut

Prajakt Raut is the founder of Applyifi.com, and author of the book for startups - ‘Starting Up & Fund Raising’ Prajakt personal goal in life is to encourage and assist a 100,000 people to become entrepreneurs. _____________ Prajakt is the founder of Applyifi - an online platform that provides startups a 36-point scorecard and assessment report on the venture's investment readiness [www.applyifi.com], and helps them improve their odds of getting funded. Prajakt is also the founding partner of The Growth Labs, a platform where growth-stage companies get sharp, incisive advice from senior professionals and experienced entrepreneurs. [www.thegrowthlabs.in] Before starting Applyifi, Prajakt was the head of operations at IAN, founding member of a leading incubator, and the Asia-Director for TiE (2004 - 2007). Previously Prajakt had co-founded Orange Cross, a healthcare services company, and was part of the founding team member of Idealake Technologies. While in college Prajakt had founded a printing business and has spent over 10 years working in leading advertising agencies. Prajakt’s book, ‘Starting Up & Fund Raising’, helps startups understand an investor’s perspective, and helps them improve their odds of getting funded. The book also helps entrepreneurs understand the building blocks of a business.

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