Sample Solution

There have been three key developments which have contributed to the boom and rapid development of crowdfunding, they are as follows: First, there has been a growing tendency of the younger generation to trust their peers, rather than institutions. The rise of the peer-to-peer marketplace is emblematic of this development. New technologies effectively eliminate unnecessary middlemen when it comes to all sorts of financial transactions, establishing direct funding channels between people. Second, there has been a growth in the sharing economy. Collaborative efforts are the hallmark of this phase of business dealings. Crowdfunding is uniquely suited to innovative endeavours. On a fundamental level, the industrial revolution was hallmarked by consumption and the digital age is about creation. The emphasis in this age is on the process of creation itself. People are now beginning to take back control of the means of production. Third, democratization of the process. Crowdfunding, particularly equity crowdfunding promises to level the financial playing field by making high-level, top-of the line services accessible to a varied cross-section of consumers, and not just to institutional clients or the top one percent. Crowdfunding is aiding in in raising the financial literacy of the general public while lowering the barriers of entry to the world of venture capital, angel investing, and stock trading. It has encouraged greater financial inclusivity.