New Forms of Funding

The Evolution of Funding by Corporates-
Prior research has explored the capital structure decisions of large, well-established Publicly-traded firms or for small firms struggling with their ideas. The dynamics of capital structure refer to ways in which a business finances its overall operations and growth over time, as needs for different sources of funds—such as debt, equity or a combination of the two—differ in progressive stages of its development. Later on, to the evidence yielded that their attempts to raise debt and equity, new and small firms face different challenges than publicly held firms do.

Extant research has shown that startup capital, as well as future capital injections, are crucial to firm survival. Moving to the future, the solutions for new and small companies finds their path in the proportion of owner’s equity in total capital injections decreases over time, the annual balance of owner’s equity increases, suggesting that owners use retained earnings to increase their funds stake in the firm. Several business and owner characteristics explain the type and magnitude of various types of capital injections. Businesses with high information asymmetry rely more on equity injections, especially owner’s personal savings, whereas those undertaking innovative activities are more likely to finance their operations with outside equity injections provided by angels and venture capitalists.

Moving to the Type of Funding by Decreasing their Ownership Stake-
The trend suggests various corporate, no matter their size; rely on different and innovative fund raiser ideas for their operations. Whether go for a national charity or a small neighborhood association, the need to raise money to without losing ownership stake in the company is considering as the major priority to corporate.

The corporate are using various tools for increasing their CSR activities and also to motivate their creative team to collect the funds by these social activities, the instruments they majorly considered are

Online Fundraising Tools: for processing online donations and linking them to your donor management software,

Event Management Tools: for planning and executing fundraising events, managing registrations, and processing payments.

Communication Tools: for sending out emails and newsletters by supporting any environmental concerns.

Social Media Tools: for automating and analyzing their social media presence by creating contest and lucky draws.

Specialty Fundraising Platforms: for executing crowdfunding, peer-to-peer, or text-to-give campaigns. The new innovative fund raising ideas they are approaching is Google Ad Grants– Through these, they are awarded up to $10,000 in ad credits, which can then be allocated to put their high-value pages at the top of search results pages. When the money is allocated strategically, participating organizations can effectively increase online conversions like donations, volunteer registrations, and event signups, Use Books

Sale/Exchange Funding– Require supporters to donate their used books in support of the cause. Once you’ve gathered plenty, hold a book sale where your community can come and browse your wide selection. The great thing about this fundraiser is that everything you raise will be straight profit since you won’t have any overhead costs.

Asmita Soni | Student |PGDM2 |SIMER