“Crowdfunding is no fad; it will outlive many parts of the financial system,” Scott McIntyre, President, Crowdfunding Professional Association (CFPA), said.

Explaining crowdfunding as a way of raising finance by asking a large number of people each for a small amount of money, he asserted that transparency and the historic nature of raising money this way was more critical in crowdfunding.

“Typically, those seeking funds set up a profile of their project on a website, use the social media alongside traditional network of friends, family and work acquaintance to raise money. In the US, some of the social endeavours started with crowdfunding,” he said.

Global conference

McIntyre was here along with President and Provost of Clayton State University, Atlanta – Tim Hynes and Kevin Demmit – at the inauguration of the first International Conference on Crowdfunding 2016, organised by the Department of Commerce, Sri Krishna Arts and Science College.

Speaking on the prospects and challenges of crowdfunding, Sudha P Rao, Chief Economic Advisor, Ministry of Rural Development, said India was undergoing transformation with people looking at new ventures and start-ups.

Explaining that there were three ways of drawing funds such as donation/reward crowdfunding, debt crowdfunding and equity crowdfunding, she said “the donation model is not that serious, but in the other two, some regulations have to be in place for peer-to-peer lending. The RBI is bringing out a discussion paper on crowdfunding and SEBI has set up a committee under Infosys founder Narayanamurthy. The committee’s report is expected this month.”

Earlier, delivering the key-note address, S Siddartha, Senior Vice-President, Global Banking and Financial Services, HCL Business Services, said crowdfunding in India is like the telecom revolution.

“We have an opportunity to leverage; most of it is about small ticket investment.”

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