World Bank2014-04-072014-04-072013https://hdl.handle.net/10986/17626Crowdfunding is an Internet-enabled way for businesses or other organizations to raise money in the form of either donations or investments from multiple individuals. This new form of capital formation emerged in the wake of the 2008 financial crisis largely because of the difficulties faced by artisans, entrepreneurs and early-stage enterprises in raising funds. Crowdfunding takes advantage of crowd-based decision-making and innovation, and applies it to the funding of projects or businesses. Using social networks, social profiles, and web-based communication, individuals and companies have raised billions of dollars in debt, equity, and donations for projects. Building a crowdfunding ecosystem depends on key enablers to build trust. This document explores specific strategies to drive crowdfunding, the risks in crowdfunding and how to mitigate them, and the potential use of crowdfunding in the developing world.en-USCC BY 3.0 IGOACCESS TO BANKACCESS TO BANK LOANSACCESS TO CAPITALACCESS TO FINANCEACCOUNTANTACCREDITATIONALTERNATIVE FUNDINGAMOUNT OF CAPITALANGEL GROUPSANGEL INVESTORANGEL INVESTORSANTI-MONEY LAUNDERINGASSET CLASSBANK LOANSBANKRUPTCYBARRIERS TO ENTRYBIDBIDSBONDSBORROWERBUSINESS ANGELBUSINESS ANGELSBUSINESS DEVELOPMENTBUSINESS DEVELOPMENT SERVICESBUSINESS FAILUREBUSINESS INCUBATIONBUSINESS ORGANIZATIONSBUSINESS OWNERBUSINESS PLANBUSINESS STARTUPSCAPACITY BUILDINGCAPITAL FLOWSCAPITAL FORMATIONCAPITAL FUNDSCAPITAL MARKETCAPITAL MARKETSCAPITAL REQUIREMENTSCAPITAL STRUCTURESCASH FLOWCHAMBERS OF COMMERCECLEARING HOUSECOMMON STOCKCOMMUNITY DEVELOPMENTCONSUMER CONFIDENCECREDIBILITYCREDITORSCULTURAL NORMSDEBTDEBT CAPITALDEBT INSTRUMENTDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT BANKSDIASPORA INVESTMENTDIASPORA INVESTMENTSDIRECT INVESTMENTECONOMIC CRISISECONOMIC DEVELOPMENTECONOMIC GROWTHEMERGING ECONOMIESENABLING ENVIRONMENTENTREPRENEURENTREPRENEURIAL ACTIVITYENTREPRENEURIAL FINANCEENTREPRENEURIAL VENTURESENTREPRENEURSEQUITY HOLDINGSEQUITY INSTRUMENTSEQUITY INVESTMENTEQUITY INVESTMENTSEQUITY OFFERINGEQUITY OFFERINGSEQUITY SECURITYEQUITY STAKEEQUITY STAKESESCROWEXPENDITURESFAMILY FINANCEFINANCIAL CRISISFINANCIAL HEALTHFINANCIAL INSTRUMENTSFINANCIAL LITERACYFINANCIAL MARKETSFINANCIAL PERFORMANCEFINANCIAL REGULATIONSFINANCIAL SERVICESFINANCIAL TOOLFINANCIAL TOOLSFIXED RATEFLOW OF CAPITALFLOW OF INFORMATIONFOREIGN CAPITALFOREIGN DIRECT INVESTMENTFRAUDFRAUD RISKFUNDING SOURCEGENDERGLOBAL ECONOMYGRAY ECONOMYGROSS DOMESTIC PRODUCTHOUSEHOLDSILLIQUIDITYINDIVIDUAL INVESTORINDIVIDUAL INVESTORSINFORMATION SYSTEMINITIAL PUBLIC OFFERINGINSTITUTIONAL INVESTORSINTELLECTUAL PROPERTYINTEREST PAYMENTSINTEREST RATEINTEREST RATESINTERNATIONAL BANKINTERNATIONAL DEVELOPMENTINVENTORYINVESTINGINVESTMENT ACTIVITYINVESTMENT ALLOCATIONSINVESTMENT ALTERNATIVEINVESTMENT BANKSINVESTMENT DECISIONSINVESTMENT OPPORTUNITIESINVESTMENT RISKINVESTMENT RISKSINVESTMENT VEHICLEINVESTMENT VEHICLESINVESTOR BASEINVESTOR EDUCATIONINVESTOR PERSPECTIVEINVESTOR PROTECTIONINVESTOR PROTECTIONSINVESTOR RETURNSIPOISLAMIC FINANCEJOB CREATIONLACK OF CAPITALLEARNING OPPORTUNITIESLEGAL CONSTRAINTSLENDERLENDERSLENDING REQUIREMENTSLEVEL OF COMMITMENTLEVEL OF COMMITMENTSLOANLOCAL FINANCIAL INSTITUTIONSLONG-TERM INVESTMENTSMARKET ACCEPTANCEMARKET EFFICIENCIESMARKET SIZEMARKET STRUCTURESMARKET VALUEMICRO-FINANCEMICRO-LENDINGMICRO-LOANSMICROFINANCEMOBILE PHONENET WORTHNETWORKING OPPORTUNITIESNEW BUSINESSESNEW MARKETONLINE COMMUNITIESPERSONAL INCOMEPLEDGESPORTFOLIOPORTFOLIOSPOTENTIAL INVESTMENTPOTENTIAL INVESTMENTSPOTENTIAL INVESTORSPRIVATE CAPITALPRIVATE EQUITYPROFESSIONAL INVESTORPROFESSIONAL INVESTORSPROFITABILITYPUBLIC POLICYPURCHASING POWERPURCHASING POWER PARITYRATE OF RETURNREAL ESTATEREGULATORY FRAMEWORKREMITTANCEREMITTANCESREPAYMENTRETURNRETURNSRETURNS TO INVESTORSRISK CAPITALRISK CONTROLSRISK OF LOSSSALE OF SECURITIESSAVINGSSECURITIESSECURITIES LAWSSECURITIES REGULATIONSSECURITY INTERESTSHAREHOLDERSHAREHOLDERSSHORT-TERM FINANCINGSHORT-TERM LIQUIDITYSMALL BUSINESSSMALL BUSINESSESSMALL ENTERPRISESMALL ENTERPRISESSOCIAL NETWORKSOCIAL NETWORKSSTART-UPSTART-UPSSTOCK EXCHANGESTAXTRAINING FOR ENTREPRENEURSTRANSACTIONTRANSPARENCYTRANSPARENT SYSTEMVALUATIONVENTURE CAPITALVENTURE CAPITAL FUNDSVENTURE CAPITALISTVENTURE CAPITALISTSVENTURE CREATIONVENTURE INVESTORWORKING CAPITAL10.1596/17626