Crowd Funding Market in the UK - Case Study Example

Crowd Funding Market in the UK The External Environment The crowd funding key drivers in its external environment includes those factors outside it that influences its performance and behavior. Some of crowd funding external environmental factors include: The marketing plan – Besides fundraising; there are three essential marketing functions that are performed by crowd funding. First, crowd funding is an excellent research tool; the organization by estimating the number of people that have visited its web page or ‘liked’ its Facebook as well as backing up its project, it can evaluate its ideas potential demand. As a benchmark, crowd funding can compare its results with similar projects results in its field. Secondly, crowd funding is an excellent promotional tool. The crowd funding products will be read about by individuals searching for projects to back up, not even thinking, they will know staffs that also perform functions of advertising. In order for any facilitated activity to be effective, the facilitator and the leader need to be crystal clear about each other’s respective responsibilities and roles (Lippit, 1994). , crowd funding is a marketing channel. It can reward its backers with products of samples. Consequently, it will not have intermediaries except for the site of crowd funding. The second key external environmental driver of crowd funding is financial management and control, in this driver crowd funding offers complex but new investment opportunities for investors and lenders. Too many bankers, especially at the most senior levels have operated in an environment with insufficient personal responsibilities (Great Britain, 2013). The site of crowd funding enables entrepreneurs to access funds while allowing them maintain control over their business. Crowd funding offers potential experts and a large base of users that can provide insight into a business success. Crowd funding improves the business owners’ process of seeking capital and assist investors recognize the significant set of options. The contraction in corporate loan demand possibly reflects a substitution away from bank borrowing and towards a greater reliance on debt markets (International Monetary Fund, 2012). The third key external environmental driver is human resource policy. In this driver, projects must designate its project leader responsible for seeking the set forth approval in crowd funding system procedures. For innovators, crowd funding can serve as a tool to improve their products and business models, as well as service prior to even offered to public (Sigar, 2012). The projects require approvals that are written by the appropriate approving official. All projects must be approved in accordance with the human resource policy procedures and the policy of crowd funding before they go live or published in any crowd funding site. The plan of the project must provide the budget overview that is clear, the account location from which donations collected will be spent on the project. Crowd funding is growing fast even though it is still in its infancy in both its applied variety sectors for instance games, music, charity, and overall transactions value (Bechter et al., 2011). The crowd funding and grants giving market Grants can serve many purposes, such as supporting crowd funding and online fundraising. Depending on the purpose, type, and source of the grant, it can range in size from a small amount of hundred dollars to millions of dollars. Grants are given to raising organizations in view of the fact that they have a variety of funding needs. Even though some grants are rather small than most individual donations, typically there are larger sums of money. A grant can be millions or tens of thousands of dollars and can be awarded over a period of years. Grants can be given by independent foundations that award local organizations with a handful of grants. 6000 Euros was raised by the Scottish community where 36000 Euros was attained after soliciting for funding ( Crowd founder, n.da)They can also be given by community foundations that award grants to their local communities. Corporate Foundations provides grants as well to the communities in which they operate. Generally, the operating foundations are not other organizations significant source of grants; and they use funds for programs that they implement and design themselves. Small start-ups companies, as well as established ones have begun to use crowd funding as a means of accruing funds for their projects (Crowd Fund Beat, 2015). Crowd funding as a solution Crowd funding constitute challenges such as the financial impoverishment of citizens, costly postal services towards overseas, unfortunate distrust and development towards electronic commerce, low IT literacy, and a small number of the internet user. The conventional wisdom here applies that to run the crowd funding campaign is sufficient and that success will come by itself. Everybody involved in lending and investing have begun to regard crowd funding as a competitor in general. The compliance to participate in a campaign of crowd funding is not centered on any investment inevitable return, somewhat the inspiration primarily lies in assisting others (Crowd Fund Beat, 2015). Taken into account, the campaign of crowd funding can serve as a profitability excellent indicator and between creditors and institutional investors and crowd funding may develop a relationship of partnership which can be each other’s excellent complement that can result in efficient use of money, healthier loan placement, and safer investment. In the national crowd funding platform, given the current circumstances will be oriented exclusively to the model with the rewards having little success chances, since it will be unable with the platforms that established already which are facing towards the entire globe. However, the principles of national crowd funding with reward crowd funding under the adequate amount of quality projects accessible, and circumstance that there is a legal framework that is appealing. Unless there is capital, there will be no jobs and businesses, even though there may be entrepreneurs with ideas (Sacks, 2012). How to reach In order to best reach its market and to introduce its product, first, crowd funding should prepare to launch. The best marketing campaigns for crowd funding are considered out long ahead of their launch so that proper resources may be aligned. Secondly, crowd funding develops a crowd funding marketing plan, a successful marketing plan of crowd funding is a strategy that is well designed that employs numerous tactics, the tactics are executed within a short window, hence it is imperative to plan. Key outreach tools are required by different tiers. The marketing plan of crowd funding should comprise tactics targeted towards every tier in corresponding with the expectation that various overlap will be supportive. Gobble (2012) affirms that crowd funding very nature makes schemes of fraud unlikely to succeed, since potential fraudsters would have to start with their associates and families The key outreach tools include: personal email, which is the most effective, it is written to the first tier connections. Secondly is the social media, it is the crowd funding marketing king. The social media beauty is not how much people can be reached but how many people through their network can share the crowd funding message. Social media is now an influence that is dominant in the corporate environment and affects even those who are aligned marginally (McDonald, 2014). Lastly is social news; this site offers a network that is entirely new to reach. Millions of guests are drawn to famous sites like Reddit across thousands of topic areas. Competitors and partners Crowd funding competitors exist in direct and indirect forms. A crowd funding direct competitor resembles the structure and project’s offering and likely within the industry that same territory. This implies that it caters to a target market that is similar and affects directly the visibility and relevancy of the project. Sometimes the threats that are largest come from businesses that are small as conglomerates operate in an entirely different space. However, indirect crowd funding competitors hold a market position that is different. Sometimes, they may overlap in a manner that complements the project. On the other hand, crowd funding has been working with many types of partners to connect them to audiences; such partners include the local authority for instance Plymouth city council, universities such as the Plymouth University, financial partners/banks for instance the Santande, Lloyds bank, corporate brand for example Auto trader, Asda, marrisons, and sports direct, local enterprises partnership for instance cornwell LEP, heart of SW LEP, and charities such as the community foundation. New forms of community that in the past were not imaginable have resulted from technology (Kolb, 2013). Were you successful? While doing this consultancy project within a group of six students, the task assigned generally ended up being successful. This was so because we established a successful working relationship, we gained each others complete participation in the project; we were able to recognize the most common types of problems that would occur while undertaking the project in terms of research. We generated specific recommendations to address all issues in the project. Howard (2013) states that its approach mode encompasses searching that is thorough coupled with realizing the ventures that are proposed online within their receipt shortest time. We developed complete actions plans that are integrated and aligned fully for effectiveness and optimum implementation. We were able effectively to address resistance from some of the group members, and we ensured momentum and ongoing motivation during the project, as a team we also knew how to ask for help when needed. Moreover, we identified other expertise required to implement the project as well as when and where that expertise was to be used. Did things work out as planned? Due to factors that are varied, some which we were unable to dictate and some under our control, not all things worked out as we had anticipated as a team. Those under our control entailed poorly defined responsibilities and roles, poor communication, cost and schedule overruns that included lack of project portfolio management and prioritization, lack of organizational support and lack of management commitment. Those that we could not detect entailed the use of unfamiliar tools. Initially, we attempted to utilize an unfamiliar tool at the same time our project was starting, this lead to problems that are severe during our projects life-cycle since has a team we had to contend with our common project duties while also dealing with new tool learning curve. Despite these factors, generally things worked out as we anticipated, we avoided the project by managing our goal and selected the correct methodology for our project, and finally, the team members managed to comply as necessitated. Did you misjudge certain aspects of the job in hand? Initially, we underestimated certain aspects of the project since we thought that the task was an easy one. However, it emerged that the project was demanding since we needed knowledge and skills in how to conduct and plan a consultancy project. Powers (2012) argued that crowd funding viability depends on whether cost-effective rules and flexibility is implemented by the SEC to encourage intermediaries’ registration of crowd funding. We needed to understand the process of consultancy through how to initiate the consultancy project, how to conduct the project and how to implement and follow up the project. Secondly, the job demanded for the search and up to date information whereby we needed knowledge and skills in how to conduct and plan research in the main approaches to doing research in this area for instance, the job demanded techniques of data collection and analysis. Everything, including team members did not fall in place as we had calculated since their cooperativeness was short-lived due to the project’s complexity. In order to solve this as a team we dealt with the changing needs of the project. To remain active in such a complex project and improve internal process within the team, we needed to be able to learn our team learning referred to the process of knowledge and information between the members which resulted in a change in the range of the team’s potential behavior. Did you learn something from the process that could be useful in the future? In the process of the consulting project, I learned numerous things while working with the team that could be useful for me in the future. First looking at things from the others perspective increased my likelihood of quality innovation. Working with the team has created for me a support environment and has propelled me towards implementation. My team environment has boosted my individual confidence and has allowed me to do the best of my work in the future. Working with my team has made the most of my own talent. The more I have worked together with the team, the more I have learnt and stopped away to become a better worker in my own job in the future. In the project we learned that crowd funding will be people’s tool to invest in communities of their own which would help to create economic health that is sustainable (Kitchens and Terrence, 2012) To what extent did your previous and current studies inform your actions? So far, I have attained and developed skills essential for modern management and become an entrepreneurial and independent business leader with business analytics and problem-solving analytics approach. This skill and knowledge combined with my gained experience from my placement in doing consultancy project within the group will give me the best pad for launch of my business career. If you consider that your academic studies have provided you with toolkit what tools have you used? Through studies, I have so far attained and managed to use toolkit such as the research skills. The research skills toolkit that I have used in the project research include organizational and time management skills, using electronic and library skills, referencing and using information sources, possible effects and the plagiarism concept. The second toolkit that I used is the presentation that entailed planning the project’s presentation, timing, practicing, and checking for the performance, evaluating and delivering the presentation. Are there tools that you don’t have which would have been useful? In this project, I believe there were no any tools that held me up in delivering it as required. Given that this project entailed tabulating trend with charting and common graphing of the research entire performance. References Bechter, C., Jentzsch, S., Frey, M. (2011). From wisdom of the crowd to crowdfunding. Journal of Communication and Computer, 8, p. 951-957 Crowd Fund Beat. (2015). Crowd Supply: the next generation of crowdfunding. [Online]Crowd Fund Beat. Available at: [Accessed 1st April 2015] Crowdfounder. (n.d a). Grants, loans and crowdfunding – the new funding mix A special report. [Pdf] Crowdfounder. Available at: [Accessed 1st April 2015] Great Britain. (2013). Changing Banking for Good: First Report of Session 2013-14. London stationary Office. Gobble, M.A.M. (2012). Everyone is a venture capitalist: the new age of crowdfunding. Research technology management, 4 (55). International Monetary Fund. (2012). United Kingdom: Staff report for the 2012 Article IV consultation. Washington, D.C: International Monetary Fund. Howard, L. (2013). Crowdfunding site StartSomeGood opens in the UK. [Online] UKFundraising. Available at: [Accessed 1st April 2015] Kolb, B. M. 2013. Marketing for Cultural Organizations: New Strategies for Attracting Audiences - third edition. London: Routledge. Kitchens, R., Torrence, P. D. (2012). The JOBS Act – crowdfunding and beyond. Economic Development Journal, 4, 11, p.42-47. Lippit, G. and Lippit, R. (1994) The Consulting Process in Action (2nd ed) Jossey-Bass. McDonald, G. 2014. Business Ethics: A Contemporary Approach Powers, T. V. (2012). SEC regulation of crowdfunding intermediaries under Title III of the JOBS Act. Banking & Financial Services Policy Report, 10 (31), p.1-7. Sacks, D. (2012). Shaking up crowdfunding. Fast company, 166, p.39-41. Sigar, K. (2012). Fret no more: inapplicability of crowdfunding concerns in the internet age and the JOBS Act’s safeguards. Administrative Law Review, 2 (64), p. 474-505. Read More