DISRUPTIVE
INNOVATION
PAGE 12
2) Capital Raising
iNM Volume - 9
Alternative platforms
Traditionally the capital raising
was facilitated by financial institutions The
access to funds were a big problem as there
were only a limited High net worth and
institutional investors But now as there is a
growing interest in start ups and
digital democratization a series of alternative
funding platforms have emerged widening
access to capital raising activities and
providing funding to a greater number of
companies and projects
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These alternative funding platforms are
already replacing the traditional method of
capital raising and are offering a more
diversified pipeline of investments One such
example of alternative funding platform is the
Crowd funding
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Traditional platforms
Alternative funding platforms provide an
opportunity for businesses to interact directly
with individual investors to widen options for
raising capital Alternative funding platforms
aggregate investment opportunities and
provides a standardised view of the
opportunities and facilitate legal structuring of
equity or debt issued
Individual investors gain direct
visibility and control over investment target
selection and allocations as individual
investors make decision for their investment
which is equivalent to their risk appetite more
businesses and projects are gaining an
opportunity to fund their capital needs
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Crowd Funding platform
Crowd funding platforms are widening access
to capital raising activities making the overall
ecosystem richer It increases the access to
funds Increases the control creates diversified
options increases the accuracy and reduces
the cost Data on crowd funding adoption is
given below
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Key challenges with the existing system are Limited
Access Timely Supply of
Capital Standardized Measurement Loss of Control
and Potential for Inadequate Funding
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