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Is Alternative Finance Disruptive or Collaborative?

Is Alternative Finance Disruptive or Collaborative?

by David Drake Alternative finance, a concept which encompasses peer-to-peer lending and crowdfunding, has experienced rapid growth globally. It started in 2008, after the global financial crisis, as an online extension of conventional financing through family and friends, then spread to include online communities of issuers and investors across the globe. This led to the democratization and globalization of capital raising processes. Several factors have contributed to the growth of alternative finance as we know it today. They include the emergence of Internet 2.0 which enables users to achieve greater online interactivity. The reduced bank lending, as well as low-interest rates experienced, after the 2008 crisis have also forced investors and issuers to explore other emerging, non-conventional investment and financing models. A report released by DealIndex dubbed “Democratising Finance” states that an environment characterised by low-interest rates will drive investors to alternative finance. Billions of dollars have already been successfully ... Read More »

What no one tells you about the $3.3 trillion market for Alternative Finance

What no one tells you about the $3.3 trillion market for Alternative Finance

by David Drake Alternative finance is a collaborative funding model that represents the newest phenomenon in funding. With more than 1250 online crowdfunding platforms, alternative financing is breaking new ground, defying conventional financing methods with respect to how businesses raise capital, and taking the world by storm. Though primarily popular for Peer-to-Peer lending and crowdfunding, critical investment banking functions such as risk management, infrastructure and due diligence traverse both online and offline financial services. Some themes that underpin alternative finance include access to asset classes that were initially set aside for  ultra-wealthy investors, and increased transparency, as well as a redefinition of who investors are across the whole spectrum of public and private asset classes. Alternative finance is also characterized by growth in the volume of funding activities within private assets and companies, and an increase in the number of companies that get funded, with target customers participating in product ... Read More »

Behind the Curtains of China’s Silk Route Fund Initiative

Behind the Curtains of China’s Silk Route Fund Initiative

by David Drake The Silk Route Fund is one of the Chinese government’s initiatives to expand the country’s agenda for development across Asia. The state-owned investment fund was launched in 2014 and aims at fostering increased investment within the “One Belt, One Road” which covers Eurasia. China has been ambitious in its plans to increase trade links, especially towards the west and into Central Asia. The initiative intends to revive the ancient Silk Road. This started taking shape when the government put $40 billion into the fund. The shifting of foreign currency by the government into a special fund has helped the initiative take on a life of its own.   Sourcing for Silk Route Fund Initiative The Chinese State Council is supposed to tap into the nation’s reserves currencies where 65% of the  $40 billion trade and infrastructure financing mechanism is to be obtained. The remaining amount will be ... Read More »

5 Financing Mistakes Every Startup Entrepreneur Should Know

5-financing-mistakes-every-startup-entrepreneur-should-know

by David Drake   For startup entrepreneurs, knowing exactly how much capital they need to raise can be a challenge. As a result, most entrepreneurs either ask for very high or very low amounts. This  undermines their fundraising efforts. Breaking down numbers accurately can help address this problem. Accurate numbers assure investors, lenders and business owners that a good deal of research and planning went into creating a realistic view of a startup’s financial needs. It is easy for startup entrepreneurs to miss out on important details when creating a financial plan. Here are five common mistakes in startup financing you need to pay attention to:   1. Securing Less Capital than you Need   According to a Hiscox survey, about 18 percent of startup owners do not secure sufficient capital because they underestimate their starting costs. Entrepreneurs tend to be overly optimistic about generating sales over a short period ... Read More »

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