Crowdfunding and Peer-to-Peer Lending Simulation

In the simulation, participants will:

• Develop compelling campaign pages, set funding targets and rewards/equity terms, allocate a marketing budget to drive momentum, and interact with potential backers.

• Browse live campaigns and borrower listings, conduct financial and narrative due diligence, bid on loan portions or invest in equity rounds, and build a diversified portfolio across risk bands.

• Actively monitor performance, reinvest capital from repayments, and potentially sell loans on a simulated secondary market.

• Use simulated platform dashboards showing success rates, default trends, and market demand to inform strategy.

• Aim for the highest combined score based on fundraising success, portfolio return, and risk management.

• Differentiate between the major models of crowdfunding and P2P lending and their appropriate use cases.

• Design and evaluate the key components of a successful fundraising campaign.

• Apply a structured framework for assessing borrower credit risk and pricing loans accordingly.

• Construct and manage a diversified P2P lending or crowdfunding investment portfolio.

• Calculate and interpret key metrics like expected return, default rate, and platform impact on net yield.

• Explain the business model and critical success factors for the platforms themselves.

1. Setup Teams receive initial capital and draft business ideas for crowdfunding.

** 2. Campaign Phase** They launch and market their campaigns, while simultaneously reviewing other teams' campaigns and borrower profiles on the P2P platform.

3. Investment and Funding Phase Capital is allocated as investments in other projects/loans. Campaigns either succeed (meet funding goal) or fail.

4. Results and Management Performance updates are generated. Returns flow in, some loans may default, and teams must manage their cash flow and reinvest.

** 5. Final Assessment** The simulation concludes with a comprehensive review of portfolio performance, fundraising success, and a ranking of teams.

• How does a Peer-to-Peer Lending simulation work for students? In a P2P lending simulation, students act as lenders on a simulated online marketplace. They analyze borrower profiles, assess credit risk, set interest rates, and allocate funds to build a loan portfolio. This hands-on P2P lending training teaches credit analysis, portfolio diversification, and the impact of default rates on returns.

• What are the learning outcomes of this alternative finance simulation? Key outcomes include mastering crowdfunding campaign design, credit risk assessment for P2P loans, investment portfolio management, and understanding the alternative finance ecosystem. It bridges entrepreneurial finance and investment management.

• Is this simulation suitable for business school courses? Absolutely. This simulation is designed for MBA programs, entrepreneurship courses, finance classes, and fintech modules. It provides practical, applied learning in disruptive financial models, complementing theoretical study.

• Can we simulate both equity crowdfunding and reward-based crowdfunding? Yes. The simulation typically includes multiple models. Teams can choose to run equity crowdfunding campaigns, reward-based campaigns, or debt-based campaigns, allowing for comparative learning.

• Do participants need prior finance experience? No. The simulation is designed with an intuitive interface and guided steps. It is suitable for beginners, yet offers enough depth in financial analysis (risk, return, diversification) to challenge students with finance backgrounds.

• How long does the Crowdfunding and P2P Lending simulation take to run? The core simulation can be run in a 3-4 hour intensive workshop or extended over multiple class sessions for deeper analysis and strategy refinement. The modular design offers flexibility for instructors.

• How is risk modeling incorporated into the P2P lending component? The simulation uses a robust, transparent risk engine. Borrower profiles have hidden risk scores based on supplied data. Loans are assigned to risk grades (A-F), with corresponding probabilities of default. This teaches quantitative risk modeling and its direct link to pricing and expected returns.

• Based on percentage of funding goal achieved, campaign "trust" metrics, and cost-effectiveness of marketing spend.

• Calculated on the risk-adjusted return of the P2P/crowdfunding investment portfolio, factoring in net yield, diversification, and capital recovery rates.

• Assessed through brief mandatory submissions where teams justify their key campaign choices and investment thesis for major allocations, demonstrating their understanding of the core concepts.