We convened a group of experts to discuss their thoughts about the current state of crowdfunding, its future, important emerging trends in the field, and the opportunities and challenges facing investors and entrepreneurs in the space. Across the board, our experts highlighted the importance of crowd-funding as a means for mobilizing resources. They also maintained that crowdfunding has already emerged as an important force in global finance, which appears here to stay, but one where we have only begun to see the ways in which it will transform the financial sector.
See Full PDF See Full PDFAbstract: South Africa has one of the highest unemployment rates in the world. Small and Medium Enterprise (SME) support from government and traditional investors has failed to create suitable levels of employment for the country. A qualitative, inductive investigation into the potential online crowdfunding has for creating successful businesses and employment was conducted over the period of one month in a current South African context. Barriers to use, government’s role in crowdfunding, and the reason for Crowdfunding’s past failures in South Africa were investigated. Nineteen semi-structured interviews were conducted with actors in the crowdfunding world, of which twelve were with local Cape Town projects using online crowdfunding for the first time, via a local crowdfunding platform. Participants described various motivations on why they used crowdfunding, barriers to using it successfully, successful campaigns, and opinions on what role the government should have in crowdfunding. A majority of participants stated that the mentorship provided to them through the partnering crowdfunding platform was key to running a successful crowdfunding campaign. A majority stated government should have an active role in crowdfunding, via promoting and investing in it. Various motivations for using crowdfunding were given, with financial need and marketing being the top choices. Locally crowdfunded businesses and projects were found to increase local employment opportunities, and create new positions. Government partnership with local crowdfunding platforms, and match funding, seems to be a likely probability in the future after the success shown by these projects.
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European Journal of Marketing
The purpose of this paper is to explore the implementation of equity crowdfunding (ECF) within the record industry in terms of challenges and opportunities, in addition to the marketing and financial implications for independent music artists and major record labels. This study adopted a qualitative methodology consisting of a two-stage interview-based research methods. A total of 44 semi-structured in-depth interviews were conducted with the CEOs of equity crowdfunding platforms in the record industry, other related record industry informants, independent artist managers and senior executives from major record labels. The findings reveal how the loyalty aspect of ECF may have significant marketing potential in terms of inconspicuously using the equity platform as a 'prosumer' identification mechanism. As this early career stage of artists is delicate in terms of establishing trust and patronage from their fans, these early marketing and ECF ventures should be implemented directly from the artist without external third-party involvement. The implications of this paper's findings and theoretical model are not limited to the two studied stakeholder groups of the record industry. The insights in relation to the obstinate lack of understanding and clarity (particularly for independent artists) which surround ECF are likely to influence short-term strategic approaches by other players throughout the wider music industry. The insights regarding negative approaches towards ECF by the labels may influence future 'coopetition strategies' for independent labels as they seek to navigate the changing industry dynamics. This paper is the first study to empirically explore the predominantly under-researched area of ECF implementation in the record industry in terms of marketing and financial consequences for artists and labels.
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