BUSINESS MODEL

A Crowd Funding Business Model for Technological Innovation and Collaboration

A Crowd Funding Business Model for Technological Innovation and Collaboration

Introduction

For any business, start up requires funding as the primary element, and technological innovation is no different. Starting up of a technological innovation requires a massive amount of funding. At the beginning, an entrepreneur has to make viable efforts to make funding possible. The problem that entrepreneurs face at initiating a technological innovation is, to draw attention of investors for capital (Acs and Audretsch 2005, p.65). This situation occurs because usually investors feel insecure while investing as they are provided with insufficient knowledge about the business and the revenue generated. Considering this problem, entrepreneurs have selected general public as an alternative for the purpose of acquiring loan and financial assistance through the internet.

This technique of acquiring financial assistance from crowd, usually by way of internet, is called Crowd Funding. Crowd funding has become an integral part of business and for entrepreneurs that provide capital in precise project investments and as well as for new venture's starting up (Hand and Garnsey 2011, p.39). Crowd funding involves collective cooperation and trust from a number of investors. Since, government policies in many jurisdictions often limit the financing approaches accessible for small private for-profit companies, therefore crowd funding can add new grounds for equity finance as a source.

Discussion

Role of the Entrepreneur

It is a widespread view that entrepreneurship and innovation are synonymous to each other. Entrepreneurship is generally defined as high risk taking where the entrepreneur assumes high risk (Acs and Audretsch 2005, p.68). Entrepreneur is always on the search for new opportunities to produce innovative products. Therefore, there is a strong link between entrepreneurship, innovation and technology. Without innovations, based on newer technologies, entrepreneurship venture may end up in a failure.

Entrepreneurial Activities

Entrepreneur has the gifted ability to transform knowledge into business opportunities to make the technological innovation a successful one (Hand and Garnsey 2011, p.39). This is done by the entrepreneur as he performs market oriented experiments to implemented change. An entrepreneur of technology tries his best to work on projects that provide benefit for the commercial and practical society.

Knowledge of Development

An entrepreneur indulges in learning activities related to development in the field of emerging technology, marketing, and networking and in electronic business. An entrepreneur must understand the fact that newly discovered knowledge is not the only factor needed for innovative venture, but existing innovation is also need to be considered equally to take into consideration.

Market Formation

An entrepreneur has a major role to play in forming market for the newly emerging technologies, as it is difficult for such innovations to compete with the already existing technologies in the market (Acs and Audretsch 2005, p.68). Thus, in order to enter the market, creating artificial market is extremely significant. The main role of an entrepreneur in market formation is, to increase the demand of the emerging technology.

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