Summarize an article from the Wall Street Journal Essay - 1

Summarize an article from the Wall Street Journal - Essay Example Torrens and other Proponents of Equity-based crowd funding deem it as a blessing in times of deepening economic crises. Since businesses themselves are not in a position to increase employment, they can provide a bigger growth potential through investment opportunities. Supporter of the notion believe that such opportunities should only be provided through online outlets as it is extremely cost-effective. It would also make the investment market more open to millions of investors (Torrens & Slavinsky, 2012). This method further enables businesses to secure and reach out to a greater client base, who are naturally motivated to help the business succeed. On the other hand, opponents of this idea believe that legalization would only cause ill-informed clients to lose their money on failing companies. It will pose a higher risk and will subsequently influence the purchasing power of people as individuals lose money due to their bad decisions. There are high chances that it will further lead to a downward spiral of recession. Moreover, there are greater chances of foul play and fraud companies may surface that may further cause the general population to incur heavy losses. It will also significantly impact legitimate businesses, as investors are fooled into investing for fraudulent companies. Therefore, businesses should take the merits of alternate investment methods in to account. (Torrens & Slavinsky, 2012) It is quite ostensible that though, equity based crowd funding may have several pros, but they can only be enjoyed if the businesses give the crowd massive returns on their investments. Businesses can obtain huge number of clients, who had initially supported the company through their investments. However, from the people’s perspective, investing in equity differs from investing in stocks that can be liquefied whenever the client wants. Equity is illiquid and as a result, there is no clear way out of this