Crowdfunding : A new alternative way to financing ?

Crowdfunding : A new alternative way to financing ?

Nowadays, we can’t hardly have not heard about Crowfunding in the news, a phenomeneon from the USA and which becomes very famous in France. As it is sometimes translated as a «  participative financing » or «  a crowd financing », this alternative to looking for funds to finance a professional project has been largely inspired by the succesful financing campain in the USA.

Crowdfunding is an Anglo Saxon word. This phenomeneon was born in the XVIIIth century. It appeared in France in 2013.

Crowdfunding or « financing thanks to the crowd» is a new means to finance projects by people. This mecanism is used to find funds, usually small sums, among many people to finance a project according to its nature.

It can work thanks to a platform on the internet. Crowdfunding can support local initiatives or projects defending any values. These operations are different from traditional means of financing and often contain an affective aspect.

It may raise funds thanks to people without asking a bank. This participative form of financing can be applied to different projects. It is also a means to develop a project.

This means of financing implies that there is a financing person and people who often have a project to create a company but who haven’t got the money to do it.

Several forms of contribution are suggested to the financing persons like donation, lending and investment plateforms.

Crowdfunding is regulated by the Authority for the Financial Markets and the Prudential Regulation Authority and it was completed by the law n°2014-559 on May 30th 2014.

Many crowdfunding sites were born with the will to finance a project. Other sectors also surf on this new means of financing like the buildings sector.

Crowdfunding is a transparent and new way to create companies or the development of projects with varied aims, thanks to collective intelligence.

Ghislaine TOVIHO

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