Implementation of Crowdfunding Models as an Alternative to Traditional Lending (Investytsiyi praktyka ta dosvid)

Summary

• Alternative online lenders can offer fast business financing but charge high interest rates ranging from 18–40% per year.p.4
• Most crowdfunding platforms levy platform fees typically amounting to 5-10% of total funds raised.p.4
• Kickstarter hosted over 650 thousand launched projects as of 2025.p.5
• The Ukrainian smartwatch startup LaMetric raised $258 thousand on Kickstarter without existing credit history or collateral.p.5
• GoFundMe accumulated over $30 billion in cumulative voluntary donations as of 2024.p.5
• During 2022, over $280 million was donated on GoFundMe to support Ukrainians following the outbreak of war.p.5

Key insights

1. Crowdfunding removes traditional bank intermediaries by establishing direct connections between entrepreneurs and retail backers via online platforms.p.6
2. Strict bank credit requirements such as collateral, proven revenue streams, and established credit histories create high entry barriers for early-stage ventures.p.2
3. Reward-based crowdfunding campaigns serve as simultaneous marketing mechanisms that validate market demand before full production.p.6
4. Entrepreneurs can combine models by securing initial seed capital through crowdfunding before applying for bank credit or venture investments.p.5
5. Incomplete legal regulation and legal gaps continue to constrain the expansion of equity-based crowdinvesting in Ukraine.p.6