| Crowdfunding is originated in 2003. Along with the rise of Kickstarter and Indiegogo, it officially get people's attention in 2009 after the financial crisis. Crowdfunding first appeared in China in 2011 and have a more rapid development in 2014. Among all kinds of Internet Finances, Crowdfunding mostly reflects the core function of finance-Financing. Characterized as inclusive and democratization, Internet finances is considered as a very important and effective way for small and micro (startups) enterprises to get finance help by bring common people into play. Crowdfundings bring above two features and function into full play. In the foreseeable future, Internet finance and Crowdfunding won't be able to shake the dominant position of the traditional indirect and direct financing in the large financial structures. The traditional direct and indirect financing will still play a huge role in the future. But crowdfunding gives small businesses a financing option. And this option gives seed stage and early-stage startup businesses an important benefit and great support. For most investors of crowdfunding, in addition to a profitable investment, is probably more of a feeling. The feeling of integration and belonging-involving in the production design, involving in helping the small businesses grow, involving in contributing back to the community. With the rebuild community effects of Internet technology, the of entrepreneurs' entrepreneurship and investors' feeling of involvement are integrated together closely. Thus, this form of financing is born with a kind of warmth, a kind of human feelings. It reflects a Humanities Finance or Human-centered Finance. The concept of whole society sharing risk it advocates reflects the new financial order Robert Schiller advocated. So it's essential to have a thorough study about Crowdfunding.Internet deeply affected the whole human society. Information technology bring huge change technically, spiritually, economically and socially level. Benefit from this change, finance generates new innovation. And this new innovation will further affect the economic and social impact. Intertwined with the Double-edged sword which technology brings and the complexity of human nature, Internet finance and crowdfunding inevitably have two sides. They can promote the financial and economic development and lead to financial crisis as well. Therefore, it is necessary to study the positive and negative function of the crowdfunding.Crowdfunding financing have different categories and each category has different operating mode. Different crowdfunding platforms are different from the number of projects, sum of money, project Financing Success rate and project Successful completion rate, some even different significantly. By thoroughly studying the generation process of the crowdfunding, its meaning, features, functions, types and operation pattern, and further finding and studying its positive and negative features, its innovative research trends and how to better playing its positive features, reducing its negative features, summarizing different country's regulatory approaches, we can make sure it can be well used in China to promote China's financial and economic development.This paper focuses on the analysis of the positive and negative functions of crowdfunding. Related literature review, the analysis of crowdfunding's connotation and the theoretical basis for the generation of crowdfunding are theoretical preparation for in-depth study of crowdfunding. The analysis of operation pattern of crowdfunding is the practical preparation for the study of functions. On these basis, this paper analyzes the functions of crowdfunding from two dimensions:specific and holistic, positive and negative functions, and finally puts forward the relevant suggestions.This thesis consists of nine chapters.This paper can be divided to three parts.Part 1 includes CKapter 1,2,3,4, is the fundtion of analysis.Part 2 include Chapter5,6,1,8, which is the main part of this paper.Part 3 is Chapter 9,which can be the suggestions of these analysis. Chapter 1 is an introduction, focusing on literature review of the relevant domestic and international paper about crowdfunding financing and internet financing, It conscientiously sum up the experience of their predecessors to explore its shortcomings for further analysis. Chapter 2 is a study about crowdfunding financing connotation. This chapter first defined what crowdfunding financing is. Then it identified the main objects of this study are reward-based crowdfuning and equity-based crowdfunding. By definition it is extended to the discussion of the essential characteristics and functions of the crowdfunding finance and all the existing abuses about the crowdfunding financing concepts. The final part of this chapter briefly introduced the emergence and development of the crowdfunding finance and foreshadowed the discussion of the generation theory of the crowdfunding finance of next chapter.Chapter 3 is the theoretical basis for the generation of crowdfunding finance. This chapter studied the generation of crowdfunding from three theoretical perspectives. The first is the perspective of Internet finance. From the definition, features and functions of the internet, it leaded to the analysis of the generation conditions of the Internet financial under the perspective of Internet finance, explored how the Internet make the financiers and investors forge a new form of partnership with its function of technical support and community reconstruction. Next one is the perspective of Institutional Economics. Based on the framework of contract transaction process, the study on the comparative advantage for small and micro (start-up) enterprises'finance under crowdfunding starts from three aspects:financing contract's preparation cost, signing cost and execution cost. Last one is the perspective of Financial development theory. The author at first simply explains the generation of crowdfunding with three generations of financial development theory, and then analyzes the generation conditions of crowdfunding from the perspective of the relationship of financial development, financial innovation and democratization of finance, holding that crowdfunding is a new form of risk-and-profit exchange based on risk-sharing.Chapter 4 is a study about operation pattern of crowdfunding. In this chapter, the operation pattern of crowdfunding is analyzed by two aspects:one is the study of operation pattern which including the common pattern analysis, the classified pattern analysis and the innovation analysis; the other is the study of pricing issue. A mathematical model based on the theory of price discrimination is used to research the price of reward-based crowfunding. Based on the contrastive analysis of the different patterns of the equity-based crowdfunding, this paper presents an applicability analysis of different valuation methods of small and micro (startups) enterprises. All the researches laid the foundation for the following analysis of positive and negative functions.Chapter 5 is a study about specific positive functions of crowdfunding. The specific refers to a single small and micro (startups) enterprises and individual investors. In this chapter, we first use the theory of transaction costs in institutional economics to analyze the cost of transaction. Different from the chapter 3 based on the analysis of contract transaction process framework, the analysis of transaction costs in this chapter is based on three aspects, namely, the search and information costs aspect, bargaining and decision-making aspect, as well as supervision costs and contract performance costs aspect. The reduction in transaction costs has given both financiers and investors a two-way benefit. Other positive functions for financiers include products and services market Pathfinder function, advertising function, information feedback function and supply chain finance function. Other positive functions of investors are known as community benefits. In the end, a mathematical model established to analyze the positive functions for investors and financiers brought by reward-based crowdfunding and equity-based crowdfunding. Chapter 6 is a study about specific negative functions of crowdfunding. The negative functions mentioned here are the risks for investors, financiers and crowdfunding platforms brought by crowdfunding patterns. The negative functions for financiers include legal risk, time risk, intellectual property risk, risk caused by improper behavior of the financiers, risk caused by investors'playing attitude and free rider role in investment management and risk caused by crowdfunding platform. The negative functions for investors include risk caused by improper behavior of the financiers, risk caused by improper behavior of the investors and risk caused by crowdfunding platform. The negative functions for crowdfunding platform include the competitive disadvantage caused by the poor efficiency of success & completion and risk of forced transition by changes of laws and regulations.Chapter 7 is a study about holistic positive functions of crowdfunding. Through the analysis, we believe that crowdfunding promote financial resource flows to small micro (start-up) enterprises, promote entrepreneurship, innovation and adjustment of the economic structure, promote the financial structure transformation and promote capital market perfect function. In the end, a mathematical model established to analyze the promotion of entrepreneurship and innovation by crowdfunding.Chapter 8 is a study about holistic negative functions of crowdfunding. Through the analysis, we believe these things may happen. First, competition may cause the crowdfunding platform to relax regulatory. And it's easy to cause systemic risk. Second, monopoly may cause the decline in the efficiency of the crowdfunding financing. Last, we may face the risk that crowdfunding involves fictitious economy excessively. Chapter 9 is suggestions about improvement of crowdfunding. In this chapter, we first analyze the internal and external power of improvement. And the internal and external improvement can achieve a good balance between efficiency and safety. Then, the research of the improvement starts from three aspects:concept, investor & financier protection and efficiency. In the end of this chapter, three issues troubled crowdfunding regulation are researched and the solution suggestions are given.The main innovation of this paper are:(1) deeply study of the connotation and the operation mode of crowdfunding, make known the essence of it, and refute the misuse of its concept. (2) put forward that it's reasonable to analyze crowdfunding from the perspective of positive and negative function, and then build the mathematical model to demonstrate the local and overall of them respectively. Put forward practical suggestions for crowdfunding regulation on the basis of the positive and negative function of crowdfunding. (3) Investigate the relationship of financial development, financial innovation and democratization of finance from the perspective of philosophy and humanity, and using the method of Risk Analysis to discuss the humanity of crowdfunding and the function of it in the process of democratization of finance.The main deficiency of this study is that:(1) the analysis of some problems can only use the mathematical model when analyzing them because of the short time development of crowdfunding and the lack of relevant data; (2) it's difficult to measure the overall negative function because it's not significant currently, and the default's correlation of crowdfudings or the correlation between crowdfunding and other financing modes are difficult to measure,so the analysis of the relevant issues will be the next step of my job. |
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