Historically, finding funding for your business was a fairly straightforward business. You asked the bank, or you saved up enough money yourself. But in our digital, virtual age, there are far more funding sources on offer. Of course, the bank (or building society) is still an option, but it isn’t suitable for everyone. There are friends and family, who can be a fantastic support for your business – both financially and emotionally. Then come other options such as angel investors or crowdfunding.
“Crowdfunding is a way of raising finance by asking a large number of people each for a small amount of money.” UK Crowdfunding Association
Sometimes referred to as crowd sourcing or peer to peer lending, crowdfunding is the opposite of traditional lending. Instead of asking a few people (such as a bank) for a larger sum of money, you break it down and ask for a larger number of people to invest a little. This makes your investment much more accessible for everyday people, not just major investors with big sums of money.