The Crowd Funding Trend in South Africa

In the last few years, there has been a growing interest in crowdfunding, as a source of small business funding, among young entrepreneurs from all over the world. Even in South Africa, several entrepreneurs are looking into crowd funding and wondering about its effectiveness. However, in order to understand the effectiveness and the growing fixation on crowdfunding, it is important to look at the basics.

What do you mean by crowd funding?

In the last few years, budding entrepreneurs may have heard of terms like crowdfunding, crowd financing, hyper funding, and equity crowdfunding. All these terms refer to the process of collecting money and other resources from a huge group of people who are willing to pool in their resources.

The process of gaining the attention, trust, cooperation, and resources of people is usually done on the internet, and is initiated by the entrepreneur or an organization. As you may imagine, crowd funding has traditionally been used for charity purposes like disaster relief, or by artists or politicians asking for the support of their fans and followers. However, this process has also been used successfully for getting enough money to fund a startup company, small business, or even a movie.