Crowdfunding : the innovative way to approach and democratize real estate financing

The phenomenon of crowdfunding is increasingly gaining attention in theory and practice. Various platforms have emerged, offering entrepreneurs and project owners the possibility to raise money from an undefined group of online users (“crowd”). Crowdfunding for Real Estate has emerged as one of the hottest crowdfunding categories, with a growth of 156% in 2014 and a campaign ranging in size from less than $100,000 to over $25 million. The legislation concerning this new kind of funding has been amended recently by the Italian Government through several recent reforms aimed at facilitating access (particularly, for start-ups) to alternative forms of micro-financing. In this thesis we aim to provide a deeper understanding of the rise of crowdfunding as an alternative funding opportunity by discussing its main characteristics, the market development, different classification approaches, its fields of application and in particular real estate, where that innovative financing method could play a key role in the current economic climate, providing an alternative to ever more tightening bank credit during the present crunch scenario.