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Crowdfunding has made a mark in the financial services industry within many jurisdictions and as much as there may be a need for regulation, sight must not be lost for what appears to be the main objective of crowdfunding, which is to facilitate easy access to capital and alternative means of financing
Crowdfunding is a way of soliciting funds from the public on an online platform; money is raised in small amounts usually in the form of donations or investments. It is essentially a vehicle to source funds from individuals or organisations to fund different causes ranging from business ideas to charity initiatives. For businesses, crowdfunding promises capital for inventive entrepreneurs in need of funding while for charity causes it promises a helping hand. The crowdfunding model has the potential to impact on the growth and development of small businesses and in most jurisdictions including South Africa, crowdfunding is seen as an innovative way to facilitate funding for small and medium-sized enterprises and finance start-up companies, with a goal of promoting economic growth.
Crowdfunding is not a new concept; however, in South Africa the crowdfunding model of financing is still in its infancy stage,...