What is Crowd-funding ?


It is an alternative funding source to help start-ups struggling to raise funds.

It was started by the Securities and Exchange Board of India (SEBI) on 17 June 2014.
Under this, funding (in small amounts) is sought from multiple investors through a web-based platform or a social networking site for a specific project, business venture or social cause.

This funding source which is quite popular in developed countries.

According to SEBI's consultation paper SEBI wants the issue fund-raising capped at Rs. 10 crore a year for each start-up. Only national stock exchanges and SEBI-registered depositories are eligible to set up a crowd-funding platform.