Crowdfunding, P2P Lending by Shubham Jindal https://padlet.com/shubham8424/vc7auoykmnmt 21/08/16 Class Notes for Digital Finance en-us 2017-08-21 07:49:14 UTC 2017-08-21 09:03:10 UTC hello@padlet.com https://padlet-assets.s3.amazonaws.com/icons/Ninja.png Crowd-Funding shubham8424 https://padlet.com/shubham8424/vc7auoykmnmt/wish/181831271 According to FCA 2013, Crowdfunding is a way in which people, organizations and businesses can raise money through online portals to finance their activities. Historically, the band Marillion in 1997 came with the idea of crowd-funding by asking 6000 fans to buy their album in advance.]]> 2017-08-21 07:50:42 UTC https://padlet.com/shubham8424/vc7auoykmnmt/wish/181831271 Advantages of Crowd-Funding over Banks shubham8424 https://padlet.com/shubham8424/vc7auoykmnmt/wish/181832039 1) Classical Banking is expensive.
2) Crowdfunding require less manpower to manage.
3) Promoting your idea does marketing too.
4) Alternative method to raise capital.
5) Lot of platforms available for crowd-funding]]> 2017-08-21 07:58:11 UTC https://padlet.com/shubham8424/vc7auoykmnmt/wish/181832039 Main Services shubham8424 https://padlet.com/shubham8424/vc7auoykmnmt/wish/181832706 1) Humanitarian Causes
2) Small Entrepreneurs
3) Startups]]> 2017-08-21 08:05:38 UTC https://padlet.com/shubham8424/vc7auoykmnmt/wish/181832706 Types of Crowdfunding shubham8424 https://padlet.com/shubham8424/vc7auoykmnmt/wish/181832911 1) Start-up Equity Crowdfunding
     a. Investments
2) Good-Cause Crowdfunding
     a. Donations
3) Pre-Order Crowdfunding
     a. Credit Advance]]> 2017-08-21 08:07:35 UTC https://padlet.com/shubham8424/vc7auoykmnmt/wish/181832911 E.g., for Fashion Designer shubham8424 https://padlet.com/shubham8424/vc7auoykmnmt/wish/181833315 Asking people to pay in advance for later delivery]]> 2017-08-21 08:12:06 UTC https://padlet.com/shubham8424/vc7auoykmnmt/wish/181833315 Litigation Crowdfunding shubham8424 https://padlet.com/shubham8424/vc7auoykmnmt/wish/181833376 When a third-party unrelated to lawsuit provides financial assistance to the plaintiff involved for a promised return from the lawsuit.

a. Helps to equalize the access to the legal system.
b. The capital provided takes care of attorney fees, witness fees and court expenses.
c. Helps to create working capital for companies involved in litigation

E.g., LexShares invites investments in legal claims.]]> 2017-08-21 08:12:44 UTC https://padlet.com/shubham8424/vc7auoykmnmt/wish/181833376 Peer-2-Peer Lending shubham8424 https://padlet.com/shubham8424/vc7auoykmnmt/wish/181834682 Internet platform bringing lenders and borrowers together. There is a hope for financial return on investments. ]]> 2017-08-21 08:24:50 UTC https://padlet.com/shubham8424/vc7auoykmnmt/wish/181834682 Problems with the Classical Bank Model shubham8424 https://padlet.com/shubham8424/vc7auoykmnmt/wish/181834826 1) Interest rates if very low, profits decline.
2) The bank rely on its customer base.
3) High operation & regulation charges
     a. KYC
     b. Credit History
c. Default Risks
4) Difficult for borrowers to get funding]]> 2017-08-21 08:26:11 UTC https://padlet.com/shubham8424/vc7auoykmnmt/wish/181834826 P2P Lending Model shubham8424 https://padlet.com/shubham8424/vc7auoykmnmt/wish/181835859 1) Works as an intermediary and make profits by arrangement fees rather than interest fees.
2) Borrowers apply for loan on P2P platforms.
3) Accepted loan application are originated by a partner bank.
4) See Infographic for process]]> 2017-08-21 08:36:22 UTC https://padlet.com/shubham8424/vc7auoykmnmt/wish/181835859 P2P Risks shubham8424 https://padlet.com/shubham8424/vc7auoykmnmt/wish/181837645 1) No compensation of defaults/loan loss recovery.
2) Less transparency
3) Risk of discontinuation of platform/ bankruptcy of P2P
4) Falling P2P prices/large prices instability will harm investors.
5) There is always risk of Fraud/ Terrorism Funding/ Cyberattacks, etc.]]> 2017-08-21 08:52:40 UTC https://padlet.com/shubham8424/vc7auoykmnmt/wish/181837645