Crowdfunders' 'Problem' A Good One To Have


Question Woman

Digital natives – the kids who grew up with an iPhone as entertainer-cum-babysitter – would call it a "First-World Problem".

The problem, according to an article by Gary Dushnitsky, an associate professor of strategy and entrepreneurship at London Business School, belongs to the crowdfunding sector of FinTech. And what do crowdfunding firms such as Money&Co., a peer-to-peer business lender, have to worry about? The academic's argument is that banks and other institutions will move in, wholesale, to the crowdfunding market and dominate it.

That's very much a First-World Problem in our opinion, as the early days of crowdfunding have arguably been characterised by quite a lot of fear and loathing from the big players.

Here is an extended excerpt of Mr Dushnitsky's CityA.M. article, with the full text available here.

"While the crowdfunding industry is still very much in its infancy, an increasing number of firms are starting to view it as a valuable business opportunity, a way of raising money in-house, or as a means of diversifying their business.

Of all these non-traditional crowdfunding platform operators across Europe, our research finds that 24 per cent are traditional financial institutions, 30 per cent are not-for-profits and 46 per cent are firms in non-financial sectors.

Platforms will, therefore, not only need to monitor competition from existing crowdfunding operators, but also from organisations like large banks entering the business.

That group finds it much easier to enter the market and navigate the regulatory minefield involved in building a crowdfunding platform.

"They have accumulated resources, such as legal expertise, making them much more likely to stay the course than smaller startups that don't always have these skills readily available.

Larger incumbents also find it easier to scale up. Again this is down to resources and capital. If more enter the crowdfunding market in the coming years, which is very likely, platforms could eventually find themselves being outnumbered. They will have a tough fight on their hands to keep market share."

M&CLogo

Loan Pipeline & Risk

Following the success of our recent £307,000 offering (B+ rating, average yield 9.2 per cent), we will be catering to the strong demand from Money&Co. lenders with a new loan offering, just as soon as the final details are complete.

Meanwhile, registered users can buy loans and their income streams from other users by visiting the after-market in our Lend section.

Bear in mind, lending carries risk. Please read the warnings on our Home and Lend pages, and the FAQ section.



FOLLOW MONEY&CO. ON TWITTER

Search news

You may put double quotes around your search to search for literals. Max. 4 words inside quotes (dashed words count as one word).

Allowed symbols: " ' & -

More news

2019
SeptemberAugust
July
June
May
April
March
February
January
2018
DecemberNovemberOctoberSeptemberAugust
July
June
May
April
March
February
January
2017
December
November
October
September
August
July
June
May
April
March
February
January
2016
December
November
October
September
August
July
June
May
April
March
February
January
2015
December
November
October
September
August
July
June
May
April
March
February
January
2014
December
November
October
September
August
July
June
MayMarchFebruary

Search blogs

You may put double quotes around your search to search for literals. Max. 4 words inside quotes (dashed words count as one word).

Allowed symbols: " ' & -

More from blogs

2019
2018
2017
2016
NovemberOctoberSeptemberAugustJulyJuneMayMarchFebruaryJanuary
2015
DecemberNovemberSeptemberAugustJulyJuneMayAprilMarchFebruaryJanuary
2014
DecemberNovemberOctoberSeptemberAugustJulyJune



Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.