Critically discuss crowdfunding as a source of funding for technology Essay

Critically discuss crowdfunding as a source of funding for technology ventures - Essay Example The European commission is presently dedicated towards releasing the potential of crowdfunding in the European Union, with the aim of enhancing the longer-term funding of enterprises and encouraging innovation (EOS Gallup Europe, 2005). Technology ventures have been on the rise lately, particularly due to high public technology interest; these ventures rely on scientific and technological advancement, selection as well as development of new products, assets or their attributes (Berger & Udell, 1998:1). Small and medium-sized enterprises (SMEs) make up a vast proportion of all the new jobs creations, with start-up companies introducing new ideas or processes of production that revolutionize ways of doing things. In the European Union, SMEs are considered to be non-subsidiary, autonomous businesses that employ fewer than 250 employees while in the US, SMEs entails firms with less than 500 workers. SMEs have gained increased attention in the previous years, as a result of their massive growth that has been attributed to the increased access to financing (Berggren, Olofsson, Silver, 2000). According to Grant Thornton, a guest speaker from Les Ross, SMEs get most of their funding from banks; given that SMEs account for the greatest number of businesses and jobs in the European Union (Kira, 2013), the commission projects that crowdfunding has the capacity to promote economic growth and job creation. This paper critically discusses crowdfunding as a potentially alternative source of funding for technology ventures, with particular attention given to small and medium-sized enterprises (SMEs). The global crowdfunding industry has experienced massive growth over the years, especially with the rapid growth of internet resources (Deakins & Freel 2012, p.9). By 2013, this industry had been estimated to be worth over $5.1 billion. The concept