Class: Global Finance Project: FinTech and the digital transformation of financial services: global implications. Finance is undergoing a rapid transformation. FinTech – technological innovations...

1. Brief introduction about fintech:
In the current era, the uses of financial technologies have been increased significantly and without fintech, the companies or current financial market cannot be run successfully and efficiently. Financial technologies are the innovations and integration of technologies into financial transactions to improve the use and delivery of financial services. There is various fintech emerged over some time such as PayTech, CryptoFinance, InvestTech, and CreditTech, etc. but the use of CreditTech has emerged significantly over the recent years. Equity crowdfunding is the type of CreditTech that has been used significantly in recent years for various purposes.
2. Detailed analysis of Equity crowdfunding:
a. Brief introduction and description:
Equity crowdfunding is a method of funding that is generally used by startups and early stages organizations for raising the capital for their business. Under this method, the numbers of investors are involved instead of funds provided, and each investor is entitled to their proportional stake in the business. Under equity crowdfunding generally, the online platforms are used to raise the funds and the investors share both profit and losses instead of their investment and in the proportion of their investment. Examples of online platforms for equity crowdfunding are such as StartEngine and WeFunder. The digital nature of crowdfunding has made the larger access to capital markets and has made easier availability of finance without no fixed obligations.
b. Traditional practices adopted:
Under the traditional method of funding, the startups were using various sources of finance such as a loan from relatives and friends, approaching a bank for a loan, equity investment through a venture capitalist. Under traditional practices, generally, there was no regulated mechanism of loans from relatives and friends which is available under equity crowdfunding. Further, under bank loans, there were multiple documentation requirements for loan sanctioning, and the owner of the business was also required to pay a heavy processing fee on business loans. Further, the owner was also required to comply with various laws and regulations for obtaining loans which were very hefty for a small businessman and was also required to wait for a longer time (CAMAC, 2021). In another method of the traditional practice of financing, the venture capitalists were investing into the business and there were higher intervention in business operational and strategic decisions. Further, under the venture capitalist mechanism generally, the smaller group of investors are involved due to which there are higher chances of equity dilution, and their intervention...