Problems and Prospects of Development of Crowd Funding in Russia

Today the most urgent question facing novice developers is the issue of attracting financing for the project. It is problematic for start-up companies and entrepreneurs to use traditional forms of raising capital, to take out a loan on good terms, for example. Due to the rapid development of information technology, new financial instruments became available, one of which is crowdfunding. Crowdfunding is the collective collaboration of people who voluntarily pool the money and other resources together, usually via the Internet, in order to support the efforts of other people or organizations. In the connection with the novelty of the method a number of problems and fears arises, that might lead to an underestimation of crowdfunding and possibly missed opportunities. This paper will consider crowdfunding as an alternative means of financing start-up companies and try to give its different aspects - and explain how it works, what are the benefits of using it, why funders and founders prefer the method. Also the paper describes the problems of and prospects for the development of crowdfunding in Russia.