Contemporary Issues
in International Finance 1
-
Class Case (Kick Starter) based analysis
General knowledge introduction
Kickstarter is a Crowd Funding platform which is stated
mission is to help bring creative projects to life. People who back Kickstarter
projects are offered tangible rewards and special experiences in exchange for
their pledges (Kickstarter, n.d.).
Crowdfunding is the practice of
funding a project or venture by raising many small amounts of money from a
large number of people, typically via the Internet (Oxford Dictionary, n.d.).
After Kickstarter lauched in 2009, there is a furious debating on that
website as it seems to be illegality funding with high success project’s rate. On
the one hand, the New York Times (2011) called Kickstarter "the people's
NEA" as well as the Time named it one of the "Best Inventions of
2010" and "Best Websites of 2011" (McCracken, 2011). Other other
hand, as the high subscribe rate in Kickstarter, some projects may exceed 100
thousands people to invest it which become the typical irregular funding case. Moreover,
as Kickstarter is different from P2P
pattern which has been control by current laws, Kickstarter is exceed the all of exemption regulation in
America. However, in America, the Crowdfunding situation has been efficient control
since Jumpstart Our Business Startups Act regulation has been signed in 2012 (Goins
& Little, 2014). After its specific regulation has been set up,
Crowdfunding are generally turned into a normal and regular pattern in current
financial market.
Class case reflection
Based on previous brief introduction and regular analysis on crowdfunding,
some further ideas related to crowdfunding based on Kickstarter case are got after
class study. In the international finance and financial management seminar, we
have been separated into four teams and create our projects to crowdfunding
from other classmates. Four teams would be generally classified to 4 types of
projects: innovation technology, computer games, electric project, shoes
creation project. First of all, after comparing with four projects, there is
another regular could be found around this area. In the seminar, an innovation technology
project related to translation is the most popularity project in that class.
Moreover, it could be found that, the more life related projects win more
investors’ attention. Then, although,
according to Kickstarter (2014), it seems that most of projects in Kickstarter
are related to arts, such as: films, music, stage shows, comics, journalism,
video games and food-related projects. From the class projects, it seems that
some projects related to computer and high technology could be the primary
elements of crowdfunding. However, this
kind of structure basis of crowdfunding may increasing to risk impact of
crowfunding and lead financial crisis. According to Galbraith and Hale (2004), there
is a typical risk could be found in technology based company which called ‘the
dot-com bubble’. It seems that the value
rise of technological corporations is rapidly, but it maintain high risk and
would lead to financial crisis. For example, the collapse of the bubble took
place during 1999-2001. In that period, some corporations like Pets com is
completely failed, some corporations like Cisco has declined lots of value but
remain stable and profitable as well as some corporations like Amazon.com has
reduced a lot but recovery and exceed
several years later. Then, combining with the crowdfunding risk on trust
security, the high risk of technology project in crowdfunding should be
challenged, highly paid attentions and study in following financial study.
References:
Galbraith, J., & Hale, T. (2004).
Income distribution and the information technology bubble.
Goins, T., & Little, E. (2014). Crowdfunding. Investment Lawyer, 21(1),
3-7.
Kickstarter,. (2014). One Billion
Dollars. Retrieved 16 March 2014, from
https://www.kickstarter.com/1billion?ref=promo&ref=PromoNewsletterMar0314
Oxford dictionaries,. (n.d.).
crowdfunding: definition of crowdfunding in Oxford dictionary (British &
World English). Retrieved 16 March 2014, from http://www.oxforddictionaries.com/definition/english/crowdfunding
McCracken, H. (2011). I just discovered
Kickstarter on TIME's list of Best Websites. Explore it and more must-see sites
on TIME.com. TIME. Retrieved 16 March 2014, from
http://content.time.com/time/specials/packages/article/0,28804,2087815_2088176_2088182,00.html
WALKER, R. (2011). Log In - The New
York Times. Nytimes. Retrieved 16 March 2014, from http://www.nytimes.com/2011/08/07/magazine/the-trivialities-and-transcendence-of-kickstarter.html?pagewanted=all&_r=0
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