<abstract xmlns="http://www.w3.org/1999/xhtml"><p> In this paper we first present some developed theories of financing that firms might accord with in their development stages. The framework, assumptions and predictions of the capital structure of firms in each theory is shown. Afterwards, crowdfunding, as a fairly new source of financing that is increasing significance, is described and is differentiated on the basis of the type of return on investment for the outside investors. In recent literature there have been models that introduce crowdfunding in the framework of financing firms through their life cycle stages. We point the difficulty of encompassing crowdfunding in the mentioned models because of characteristics that are unique to it from the perspective of the investor and the firm. While it is not surprising that crowdfunding is used in development stages, these characteristics make it difficult to construct a model of financing firms that has traditional means of financing and crowdfunding.</p></abstract>

In this paper we first present some developed theories of financing that firms might accord with in their development stages. The framework, assumptions and predictions of the capital structure of firms in each theory is shown. Afterwards, crowdfunding, as a fairly new source of financing that is increasing significance, is described and is differentiated on the basis of the type of return on investment for the outside investors. In recent literature there have been models that introduce crowdfunding in the framework of financing firms through their life cycle stages. We point the difficulty of encompassing crowdfunding in the mentioned models because of characteristics that are unique to it from the perspective of the investor and the firm. While it is not surprising that crowdfunding is used in development stages, these characteristics make it difficult to construct a model of financing firms that has traditional means of financing and crowdfunding.

Crowdfunding in a Context of Financing Firms Through Their Life Cycle

Zagreb International Review of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

{"article-title":"Crowdfunding in a Context of Financing Firms Through Their Life Cycle"}

In this paper we first present some developed theories of financing that firms might accord with in their development stages. The framework, assumptions and...

Crowdfunding in a Context of Financing Firms Through Their Life Cycle

Published Online: Jul 03, 2018

Page range: 105 - 118

DOI: https://doi.org/10.2478/zireb-2018-0006

Keywords
crowdfunding, small business financing, life cycle of firms

© 2018 Tin Horvatinović, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Crowdfunding in a Context of Financing Firms Through Their Life Cycle

Published Online: Jul 03, 2018

Page range: 105 - 118

DOI: https://doi.org/10.2478/zireb-2018-0006

Keywordscrowdfunding, small business financing, life cycle of firms

© 2018 Tin Horvatinović, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
crowdfunding, small business financing, life cycle of firms