What is crowdfunding? What are the potential risks and rewards?

Until recently, financing a business involved asking a few people for big sums of money. Crowdfunding is turning this idea on its head, using the internet to help entrepreneurs talk to thousands – if not millions – of potential funders that each contribute a small amount.

The idea is the latest in funding innovations. It means small business owners that are being turned down by High Street banks now have an opportunity to appeal directly to small investors. Equally, whereas investing in small businesses was previously the domain of the very rich, this new concept means anyone can reap the benefits of investing in fledgling start-ups – whether you want to risk £20,000 or £5.

Read more: http://www.thisismoney.co.uk/money/smallbusiness/article-2333399/Crowdfunding-does-work.html#ixzz4r7I5HA5X
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