VP of Operations
Crowdfunding: Disrupting Traditional Finance
By Hitesh Rathod and Aris Economopoulos
Until recently, market observers and traditional finance firms have questioned the viability of crowdfunding
as a legitimate method of alternative financing. Now, against the backdrop of the crowdfunding industry’s rapid
evolution from donation and reward-based models towards sophisticated securities-based models, traditional
market players are closely monitoring the rising wave of disruptive financing methods.
From rewards-based models to securities-based crowdfunding models, adoption is growing significantly
due to improved efficiency and increased access to capital. As a result, crowdfunding is experiencing
exponential growth: Crowdsourcing solutions firm Massolution reported that global crowdfunding volumes
exceeded US$5.1 billion in 2013, nearly doubling from US$2.7 billion in 2012 and more than tripling the US$1.3
billion in 2011. Global equity and lending-based crowdfunding raised US$2.3 billion in 2013, more than tripling
the US$643 million raised in 2011, with over 70% raised in North America.