Crowdfunding as a source of financing for ventures Social in El Salvador

Abstract

One of the major obstacles entrepreneurs face is the difficulty in accessing the financial resources provided by traditional sources of funding. This is due to the limited terms offered to them—either because their projects are new or because they are social in nature—leading these sources to view them as high-risk investments or ones that will not generate a return on their investment. However, thanks to advances in information and communication technologies, strategies have been developed that serve as new tools to strengthen an evolving economy, paving the way for the creation of a new financing model in which people can exchange goods and services with one another without the need for intermediaries. This concept is known as the sharing economy. The sharing economy paves the way for the use of digital platforms to obtain financial resources for various projects, with these platforms serving as the point of convergence between entrepreneurs and potential donors or investors. This is known as crowdfunding. The information gathered in this article provides insight into the types, advantages, and operation of crowdfunding as a source of funding, as well as an analysis of what platform administrators look for in the projects that are submitted. Therefore, any entrepreneur seeking to launch a business idea or project in the social sector must carefully consider the characteristics, criteria, conditions, timelines, restrictions, and costs of the platforms that best suit their venture so that it can be carried out optimally.