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An uncertain future
EVEN as crowdfunding gains traction here, there will be uncertainty ahead for this new funding platform. According to Andrew Tinney, partner, financial services, KPMG, in Singapore, most firms will raise only modest amounts through this channel. The large number of investors involved also means any recipient needs to be able to handle a large number of stakeholders.
"Those in receipt of crowdfunding will also come under the social media microscope. This can create enormous pressure for results and sometimes unwarranted transparency about setbacks in product design or manufacture.
"Internet reputations can be made but can also be destroyed overnight," Mr Tinney wrote in a report Crowdfuding in Singapore that was released last year.
He noted that in the end, the success of crowdfunding is likely to be tied to the legal and regulatory framework that is applied and the ability of that framework to keep up with constant innovation.
"Small entrepreneurs can participate in a great new source of funding but policymakers and regulators will have an ongoing headache."