Thanks to the internet many people have brilliant business ideas but are unable to carry out these ideas to obtain the benefits thereof and develop society due to lack of finance. This means that many ideas are left to languish in despair as people complain of lack of employment opportunities. Successful businesses offer job opportunities and the ripple effect will be seen in the growth and expansion of the economy because of the money spent. Therefore, lack of sufficient capital has crippled many business ideas that would have proved a breakthrough in many lives. The platform to obtain a capital that can guarantee the successful start of a business and future stability of the business is the great question that prompts many financiers and businesspersons to consider and reconsider investing in and initiating a business (Daly, 2015) . The startup capital should be enough to run the business from its inception until such a time that it can generate profit and enough capital to run independently without requiring a heavy outsourcing of capital. The internet platform has helped to solve this headache to many business minds. The internet, especially social sites like Facebook, Twitter, among others provides an avenue through which a brilliant business mind access and use it as a pedestal for growth. The crowd audience obtained from the social sites can be used to raise funds when a business imitator posts his idea and the crowd gets to view the idea The interested parties can decide to invest their money into the business idea obtain profits and shares from the business. Therefore, crowdsourcing is the act of sourcing funds through the internet by posting a business idea and allowing interested people to invest their money into the business (Daly, K. M. (2015) . This platform is fast because the information reaches many people as soon as it is posted and is spread rapidly and inexpensive as compared to other platforms that would require much capital trying to advertise.
Internet
Figure 1 the number of internet users in the world since 2000 to 2016
The internet is the backbone of modern crowdsourcing. Therefore, the crowdsourcing would not be practical without internet. The number of internet subscribers has increased since the year 2000 (Deloitte, n.d). The graph confirms a steady increase. This may be attributed to increasing technology, the availability of technologies used to access the internet like phones, tablets, laptops, computers, and other gadgets. In addition, this may be attributed to the increase in computer education and its use in employment. The constant increase in the number of internet users in the world is an important broadcaster for the future of crowdsourcing as a viable option for fund generation efforts (Wash, 2013) . Therefore, many people that can prove to be worthy investors can be reached through the internet; the technique would become more invaluable in the future, as more people will be using the internet to socialize and even conduct business.
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Crowdsourcing Trends
The term crowdsourcing can be used for sourcing of finance and human resource among other business requirements such as technology. More specifically, when addressing the sourcing of finance for a business the term Crowdfunding would be more direct in addressing the matter. As earlier stated, crowdsourcing is becoming a principal source of capital for many brilliant businesses that would otherwise not pick up for lack of starting capital. Initiating the process is not a simple one because it requires determination on the side of the inventor and completes trust and faith on the part of the investor who has to decide to invest his money (Daly, K. M. (2015) . Nonetheless, the two interviewees both agree on the significant role that crowdsourcing is playing and continues to play in the outsourcing of capital for businesses.
Crowdsourcing is continuing to change the landscape of the business world and bringing the consumers and the business into close association (
Paniagua & Korzynski, 2017). This close connection is important for the business in terms of both marketing and sourcing for capital. Investors have varied interests in the wide range of businesses posted on the social sites. A statistics has been released which shows the pattern of investors involved in various investments as illustrated below.
Figure 2 . Investor investment pattern across 13 industries. Retrieved from https://pdfs.semanticscholar.org/7513/f29210569444dd464c33147d9f824e6fbf08.pdf
As seen from the 2015 statistics, the film industry receives the greatest investor participation in terms of the number of projects. This is followed by the music industry, then publishing, games, art, design, food, and other categories taking lower leads. The participation of the investors or their involvement in these projects is determined by several factors among which the returns realized from such an investment and the security of their money. This graph indicates that the entertainment industry, which is composed of games, art, film, and music, is a leading source of profit generation, which attracts more investors and project developments.
Crowdfunding as a method of raising funds is increasing as illustrated in the figure below
Figure 3 Crowdsourcing trend through the years 2009 to 2010. Retrieved from https://pdfs.semanticscholar.org/7513/f29210569444dd464c33147d9f824e6fbf08.pdf
Moreover, the volume of money raised through crowdfunding has been increasing steadily through the years 2009 to 2011. This is a picture of the growing strength of crowdsourcing. It has created the platform for sourcing money through donations, lending, rewards, and equity. The statistics are encouraging and is a pointer to the future of crowdsourcing. This growing trend can also be supported by the graphical representation below which shows the growth of Crowdfunding since 2007 and predicting its future through the year 2018.
Figure 4 trend of crowdsourcing since 2007 through 2018 ( Bijkerk, 2014 )
Crowdsourcing has received different reception in different countries or it suffices to say its growth and acceptance in various countries vary widely.
Figure 5 Equity Crowdfunding per country ( Bijkerk, 2014 )
Figure four shows that equity lending and peer-to-peer Crowdfunding is widely practiced in the United States followed by China and the UK and on a relatively small scale in countries like Germany and others. It is important to note that the leading countries are major world economies and this augments the role equity crowdfunding is playing in the development of such economies (Cox, 2014) .
Crowdfunding as loan and equity
Crowdfunding can be conducted through two major fronts; the fund can be raised as a loan either to the business or through the provision of equity in shares and profit sharing among the investors and the business owner. Either way, the business has to give back to the investors but crowdsourcing by the provision of a room for equity is more preferable for a starting business as will be discussed below.
Crowdfunding as a loan
Many businesses have had to start up with loans. Loan acquisition is an inevitable path for many businesses seeking to make a major entry into the market and compete or a new business trying to create a strong impact in the market and firm foundation. Traditionally, the banks have often given loans besides other small lenders. The bank system has also ways demanded a lot of terms and conditions be met by the person or business requiring a loan. Crowdfunding offers an alternative to these stringent measures created by the banks by coming in to offer loan to businesses at better and friendly terms (Agrawal, Catalini, & Goldfarb, 2014). In addition, the banks have created some phobias through their strict requirements, which in some way, have prevented many people from seeking loans through the banks. Crowdfunding as an alternative has helped to break the barrier that the banks have created and the monopoly that they have long enjoyed (Cox, 2014) . This is beneficial to the business people as crowdsourcing in future will have an impact on the loan interests prescribed by the banks.
Funding through loans is commonly applicable to businesses already running (Potts, 2012) . Such businesses have developed a history of profits and losses and their performance can be gauged before making a request for some funds. Moreover, the established business can meet the loan security that the lenders need as opposed to starting businesses whose fate cannot be measured and predicted. Therefore, loans for larger an already running business in some sense can assure the owner the possibility of getting a larger fund as opposed to a starting business which may create fear in investors who are fearing to invest only to lose. Moreover, a starting business will require much effort to convince investors to offer loans or collaborate with the business in its early stages. The reasons must be convincing by creating the business profile, which has details stating the nature of the business, goals of the business, its objectives, costs, and code of operation (Potts, 2012) . When the interested persons get to see this online profile they may choose to invest into the business through stock or cash and obtain shares in the business (Cox, 2014).
Crowdfunding and Equity
Investing a large amount of capital in a business may be a difficult decision for some investors. Nonetheless, the obstacle can be solved through attachment of equity as an incentive to encourage a willing investor to channel their capital into a business with diverse uncertainties regarding its ability to attract customers and stay competitive in the market. Some investors would like to oversee how their capital is invested directly with their involvement (Agrawal, Catalini, & Goldfarb, 2014) . Such investors would not only want to invest their money but also be involved in some degree of responsibility in the business. This way the investor would have a better say that if the business owner had just received their money and invested it as he wishes. When the investor has more involvement in the business they get to share the responsibility and profit that accrues from the business (Wash, 2013) . This agreement may be long-term or may be entered into until the business is stable to run on its own. This alternative is ideal compared to the loan provision. Through engagement of the investors, a sense of security is created. The investors have to say on how the business runs. In case of losses or other unexpected calamities, the investor is aware and involved the business does not suffer fear of losing funding. It may guarantee a sharing of losses as the profits are also shared (Potts, 2012) .
As the investor gets involved in the running of the business, there is a better chance to enjoy some added privileges (Wash, 2013) . First, the investors have invaluable experiences that may become handy to the business. Through their history of investing in successful and unsuccessful business opportunities, they may make a great input in terms of advice as opposed to a business run by novices.
The business will also enjoy a broad marketing and outsourcing (Potts, 2012). The investors, as many, as can possibly be through crowdsourcing, have connections with other businesses involved in a similar or related enterprise and they may help in marketing the business idea to other investors which may create a great financial pool and market for the business. The benefits are numerous. However, it is important to emphasize that the benefits because the partnership should allow the investors to have shares in the early stages of the business up to a point where they have stabilized (Agrawal, Catalini, & Goldfarb, 2014).
Therefore, crowdsourcing through loans and provision of equity are strategies adopted to raise funds. However, the provision for equity would encourage more investors to come in and involve themselves wholeheartedly in the business while the loan provision leaves the business to struggle and make a profit and raise the capital loaned to it.
Figure 6 crowdsourcing in 2012 retrieved from https://pdfs.semanticscholar.org/7513/f29210569444dd464c33147d9f824e6fbf08.pdf
In the year 2012, crowdsourcing platforms were predominantly occupied by outsourcing through other means other than equity. The pie chart in figure 4 indicates that crowdsourcing through equity obtained a small percentage of 8% while other sources either loan among others acquired the greater percentage of 92%. Therefore, the model was less preferred as compared to other offers such as loans (Wash, 2013) .
Figure 7 heatmap of the probability of a project being funded https://pdfs.semanticscholar.org/7513/f29210569444dd464c33147d9f824e6fbf08.pdf
Figure 7 gives an illustration of a heat map showing the probability of a project being funded from the day of its posting on the internet. The white line cutting diagonally through the graph shows steady growth in the number of investment on the condition that the company is meeting 1% of its goal per year. Therefore, a business can continue to receive funds any time as long as it is promising and the investors have confidence in its performance in crowdsourcing.
Advantages and disadvantages of Crowdfunding
Equity crowdfunding has proved highly beneficial in solving the financial crisis created by periods of recessions. Sourcing of funds through equity crowdsourcing allows many people to bring together the small cash they have. When pooled, it creates a sufficient capital to start and run a business ( Bijkerk, 2014 ). Moreover, equity crowdsourcing allows the business to obtain funds at low-interest rates while the lenders also stand a chance of receiving high returns for their money. There is a spread of risk between the investors and the business ( Bijkerk, 2014 ). Therefore, both the business and the lender stand a win-win chance.
Some of the limitations faced by crowdfunding are that the sector is still small as compared to the traditional lending markets like banks. Thus, it still has a long way to go in order to provide sufficient funds for all projects. Lastly, crowdsourcing is highly limited in some countries due to strict regulations, which have curtailed its rapid progress witnessed in other countries like the USA, China, and Germany ( Bijkerk, 2014 ).
Conclusion
Sufficient funds are the breath of every successful business and many businesses may involve a huge startup fund that makes it almost impossible for the initiator to put the idea into action. Just as the computer operates through the principle of garbage in garbage out so does a business. In order to make a profit from a business and in this case a good profit then one must be ready to put in much capital into the business. Obtaining such a capital may be a nightmare but the internet has solved many problems and sourcing of funds is one of them. Crowdfunding is increasingly becoming the fastest and easiest way to reach investors and obtain funds to finance a brilliant business prospect. Crowdsourcing allows one to obtain funds in form of a loan or through equity. The investor takes part in the management of the business through funding and decision-making or in some interactions agreed upon by the business owner and the investors. Thus, it allows an inventor or entrepreneur to reach many people within a short time and without spending much capital through the internet. This method is also becoming more efficient than the banking systems, which have rigorous traditional requirements, and standards that must be met by the inventor. Crowdsourcing through equity, on the other hand, attracts willing investors who associate themselves with the business and are engaged in it out of love and passion for it and the business gets to acquire experience, enjoy a wide marketing and outsourcing of investors and experienced personnel. It is also important to note that the sector is ever growing as it faces challenges like its small size and strict regulations.
References
Agrawal, A., Catalini, C., & Goldfarb, A. (2014). Some simple economics of crowdfunding. Innovation Policy and the Economy, 14 (1), 63-97. Retrieved Jun. 12 2018 from http://www.nber.org/papers/w19133.pdf
Cox, J. (2014). Crowdfunding Isn’t Just About Money Mr. Dyson. The Conversation . Retrieved Jun. 12 2018 from https://theconversation.com/crowdfunding-isnt-just-about-money-mr-dyson-25245
Daly, K. M. (2015). Health as a social media. In The New World Of Transitioned Media . 35-51. Springer International Publishing. Retrieved Jun. 12 2018 from https://www.researchgate.net/publication/268447234_health_as_a_social_media
Potts, L. (2012). Amanda Palmer and The# Lofnotc: How online fan participation is rewriting music labels. Participations, 9 (2), 360-382. Retrieved Jun. 12 2018 from http://www.participations.org/volume%209/issue%202/20%20potts.pdf
Deloitte. (n.d.). The three billion enterprise crowdsourcing and the growing fragmentation of work. Retrieved Jun. 12 2018 from https://www2.deloitte.com/content/dam/deloitte/de/documents/innovation/us-cons-enterprise-crowdsourcing-and-growing-fragmentation-of-work%20(3).pdf
Paniagua, J., & Korzynski, P. (2017). Social Media Crowdsourcing . Retrieved Jun. 12 2018 from https://www.researchgate.net/publication/316996005_Social_Media_Crowdsourcing
Wash, R. (2013). The value of completing crowd-funding projects. Retrieved Jun. 12 2018 from http://www.rickwash.com/papers/donors-choose-icwsm.pdf
Bijkerk, W. (2014). Risks and benefits of crowd-funding. In Amcc Training Seminar, Tokyo (Vol. 10).
