Identify the alternative available to the firm


An independent movie producer with a modest but loyal fan base is short of funds for her next movie. Knowing that a bank loan is an unrealistic option, she is considering crowdfunding. But she is not very familiar with it or how to go about starting and conducting a crowdfunding campaign.

Prepare a report for the producer explaining the different approaches to crowdfunding, including the equity funding approach. Alert the producer to any drawbacks that might make people less willing to contribute to funding her movie and positives that might make people more likely to fund her movie. Conclude your report with a recommendation of which crowdfunding approach you believe would be most effective for this independent movie producer.

As part of your preparation for your report, view the above videos and read the article from the text (pp. 269-270): Is It Safe to Invest Through Crowd-funding?

1. Follow the report format outlined below.

2. Describe and define crowdfunding (sometimes shown as crowd funding). But sure to include the different approaches to crowdfunding, including equity funding.

3. What are the advantages to the movie producer?

4. What are the advantages and disadvantages to the potential funder? Include such concepts as asymmetric information and investment risk.

5. Recommend one approach that would be most appropriate for this producer and remember to include the reasons why you selected it.

6. Remember that citations go into the body of the report and the references go at the end of the report. Both are required.

Case Studies follow the following general format:

•An Introduction where you explain the situation and the decision(s) facing the firm. Most, if not all, of this information will be in the case.

•Alternatives: here you define terms as needed and identify the alternative available to the firm.

•Evaluate the alternatives: discuss the advantages and disadvantages of each of the relevant alternatives.

•Recommendation and conclusion: select one of the alternatives as your recommendation. Support your recommendation with information used in your case analysis.

Provide specific and detailed recommendations.

•Use additional resources as needed, but remember to cite and reference them properly using APA style.

•In a case you apply your knowledge of the material being covered in the class. As well as using your analysis skills as applied to the case information.

Note: For a short case such as this one, the Alternatives discussion can be combined with the Evaluation discussion as single section of your case.

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Microeconomics: Identify the alternative available to the firm
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