Week 8 Reading Reflection

This weeks reading was interesting because it was more focused on business and capital.

1. The biggest surprise to me in this chapter was how commercial banking worked and their slow decline in the economy. Currently there are only 7,000 commercial banks, and by the end of the decade there will be a predicted 4,000 left. Commercial banking give out a certain number of loans, and that includes to entrepreneurs.

2. One part of the reading that was confusing was crowdfunding. I have witnessed social lending between parents and stories told by my parents, but never heard of crowdfunding. In the book, crowdfunding is defined as banking 2.0. I had to google it after my reading of that section and then reread it after.

3. The first question I would ask the author is if he thinks social lending is a positive action for the economy, or does it affect the economy negatively? The second question I would ask if he had no other choice to debt finance, would he do it, or not? He jots down advantages and disadvantages in the book.

4. In the chapter. the author talks about equity financing, which is the process of the entrepreneur sharing the company with the person who funded his idea/service. The author describes the process as time consuming, difficult, and expensive. Now, with all of the adjectives listed, I agree with except, expensive for who? Not exactly the entrepreneur, but for the person lending and investing the money into the product. That is the only thing that I found that I would disagree with the author.