Innovative Investment Avenues
Debasis Mohanty, Assistant Professor, Department of Management, Kalinga University, Raipur.
Investment refers to the allocation of money or resources with the expectation of generating income, profit, or appreciation over time. It involves committing funds to various assets, such as stocks, bonds, real estate, mutual funds, or businesses, in the hope of achieving a positive return on investment (ROI).There are several innovative sources of investment that have gained popularity in recent years. Here are a few examples:
Crowdfunding: Crowdfunding platforms allow individuals to invest small amounts of money in various projects or startups. It provides an opportunity for entrepreneurs to raise capital by tapping into a large pool of potential investors. Platforms like Kickstarter and Indiegogo are popular for creative projects, while equity-based crowdfunding platforms like Seedrs and Crowd cube allow investors to buy shares in startups (Belleflamme et al., 2015).
Impact Investing: Impact investing focuses on generating a positive social or environmental impact alongside financial returns. Investors seek opportunities that align with their values and support companies or projects addressing issues like climate change, poverty alleviation, or sustainable development. Impact investment funds and platforms like Swell Investing and Triodos Investment Management have emerged to cater to this growing demand (Barber et al., 2021).
Angel Investing Networks: Angel investors are individuals who provide capital and mentorship to early-stage startups in exchange for equity. Angel investing networks connect accredited investors with startups seeking funding (Edelman et al., 2017). Platforms like Angel List and Gust facilitate these connections, making it easier for startups to access investment from experienced individuals.
Venture Capital Funds: Venture capital (VC) funds are pools of capital raised from institutional investors, high-net-worth individuals, and corporations. VC funds invest in early-stage and high-growth startups with the potential for significant returns. In recent years, we’ve seen the rise of specialized VC funds focusing on specific industries or technologies, such as healthcare, artificial intelligence, or clean energy.
Peer-to-Peer Lending: Peer-to-peer (P2P) lending platforms connect borrowers directly with lenders, cutting out traditional financial institutions. Individuals can lend money to others and earn interest on their investments (Bachmann et al., 2011). These platforms provide an alternative for borrowers who may not qualify for bank loans and allow lenders to diversify their investment portfolios. Examples of P2P lending platforms include LendingClub, Prosper, and Zopa.
Cryptocurrency and Blockchain: The emergence of cryptocurrencies and blockchain technology has opened up new avenues for investment. Cryptocurrencies like Bitcoin and Ethereum have gained significant attention, and investors can buy and trade these digital assets on various cryptocurrency exchanges (Bagchi et al., 2023). Blockchain technology also presents investment opportunities beyond cryptocurrencies, as it has the potential to revolutionize various industries such as supply chain, finance, and healthcare.
It’s worth noting that while these innovative sources of investment can offer exciting opportunities, they also come with their own risks and considerations. Before investing, it’s important to conduct thorough research, understand the associated risks, and, if necessary, seek professional advice.
Bachmann, A., Becker, A., Buerckner, D., Hilker, M., Kock, F., Lehmann, M., … & Funk, B. (2011). Online peer-to-peer lending-a literature review. Journal of Internet Banking and Commerce, 16(2), 1.
Bagchi, S., Mohanty, D., & Girdhar, R. (2023). Transformation of Financial Trading With Blockchain Technology in India. In Building Secure Business Models Through Blockchain Technology: Tactics, Methods, Limitations, and Performance (pp. 106-127). IGI Global.
Barber, B. M., Morse, A., & Yasuda, A. (2021). Impact investing. Journal of Financial Economics, 139(1), 162-185.
Belleflamme, P., Omrani, N., & Peitz, M. (2015). The economics of crowdfunding platforms. Information Economics and Policy, 33, 11-28.
Edelman, L. F., Manolova, T. S., & Brush, C. G. (2017). Angel investing: A literature review. Foundations and Trends® in Entrepreneurship, 13(4-5), 265-439.
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