Crowd funding has potential to increase entrepreneurship by fill the funding gap between investors and entrepreneurs. It is beyond the traditional circle of owners, relatives and venture capitalists. There is some crowdfunding web sites like Kickstarter & Indiegogo for collection of money. It take small revenue from a percentage of the funds raised. The SEC (Securities and Exchange Commission, United States) regulates equity-based crowdfunding ventures in the United States.

Advantages and Disadvantages of crowdfunding

Advantages
1.Speed and accessibility: You don’t usually need any special qualifications to start a crowdfunding campaign, nor is it especially hard to create one from scratch.It can be a fast way to raise finance with no upfront fees.
2.Marketability: Once your campaign is designed and choose media for marketing you can greatly increase the number of people you reach through any number of marketing strategies. Pitching a project or business through the online platform can be a valuable form of marketing and result in media attention.
3.Sharing your idea, you can often get feedback and expert guidance on how to improve it.
4.It is a good way to test the public’s reaction to your product/idea - if people are keen to invest it is a good sign that the your idea could work well in the market.
5.Feedback- Investors can track your progress - this may help you to promote your brand through their networks.
6.Ideas that may not appeal to conventional investors can often get financed more easily.
7.Your investors can often become your most loyal customers through the financing process.
8.It’s an alternative finance option if you have struggled to get bank loans or traditional funding.

Disadvantages -
1. Compliance- It will not necessarily be an easier process to go through compared to the more traditional ways of raising finance – not all projects that apply to crowdfunding platforms get onto them
2.Competition- When you are on your chosen platform, you need to do a lot of work in building up interest before the project launches – significant resources (money and/or time) may be required.
3. Responsibility- If you don’t reach your funding target, any finance that has been pledged will usually be returned to your investors and you will receive nothing.
4. The risk of failure- Failed projects risk damage to the reputation of your business and people who have pledged money to you.
5. Copyrights is necessary- If you haven’t protected your business idea with a patent or copyright, someone may see it on a crowdfunding site and steal your concept 6. Getting the rewards or returns wrong can mean giving away too much of the business to investors.
7.Fees- Most crowdfunding platforms will take a percentage of the contributions you raise. These fees are minimal, but may still reduce the amount of money you’d otherwise get.
stockNV provide consultancy for How to start campaign for crowd funding.