“CONDUCTING A CROWDFUNDING CAMPAIGN IS ESPECIALLY VALUABLE FOR B2C FINTECH COMPANIES AS IT GENERATES STRONG NETWORK EFFECTS ”
MICHELE SCHUELI LECTURER OF FINANCE AT UNIVERSITÀ DELLA SVIZZERA ITALIANA ( USI )
especially true in the case of fintechs whose target customers are institutional investors , as doing a retail-focused crowdfunding campaign might dilute the brand in their eyes .", adds Schueli .
Briana Marbury , Executive Director at the Interledger Foundation , also contributes her thoughts ; “ If a firm is able to raise enough capital to support their endeavours , crowdfunding can be an excellent alternative to VC funding . Crowdfunding gives you more freedom and flexibility regarding the use of the funds , whereas VCs tend to be more restrictive with stipulations and lots of oversight , including mandatory board seats . Also , many VCs require benchmarks that may have an adverse effect on progress by disrupting the natural creative process and shifting priorities to meet imposed goals . The upside to VCs is they often share their business expertise and connections with the firm in an effort to make sure its investment is successful .”
Overall , crowdfunding allows entrepreneurs to identify their customers and adjust the product they are developing . They can have a better idea about what is important for people and learn more about how to improve their services . However , crowdfunding may not work for every fintech incumbent , and some may choose a different path . Ultimately , it depends on what the startups are offering and their target audience .
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