I am sure
you are all aware of Crowdfunding models, when it comes to raising money for a
project. A relatively unsure trend at the start, has in the course of these
last few years, built up speed, and now is considered the main option for
independent producers or individuals, to take their project or product to the
market, sidestepping more conventional sources of money raising, like going to
the bank, or seeking a venture capital. It capitalizes on two factors : (a) the
all-time successful concept of raising money from close family and friends, and
(b) the willingness of otherwise unreachable (to you) people, to become
customers and purchase your project or product if available. Both were
facilitated by the advent of numerous Crowdfunding sites.
What is
Crowdfunding ?
Crowdfunding,
as its name suggests, is a funding method where common people like you and me,
henceforth the crowd, fund your personal or business project with their own
money. There’s a term that we commonly use to describe this money-giving action;
it’s called a donation. The main difference between Crowdfunding and donation
is that Crowdfunding is tied to the American
JOBS act that allows online sales of small stock to a huge pool of
investors, although the act has not been passed yet. Nonetheless, you could
still embrace the Crowdfunding method to raise your project funds, as long as
you don’t sell any kind of stock. Different Crowdfunding sites could have
different a purpose or approach , but overall the concept is simple – you post
your project to a large group of site users, or "potential
investors", and they will fund your project with money if they are
interested in the project. you can start a Crowdfunding exercise for free as
you will only be charged when your project has raised some funs or the full
amount. There’s nothing to lose and this is great for publicity. [1]
To put it
in context : Crowdfunding (alternately crowd financing, equity Crowdfunding,
crowd-sourced fundraising) is the collective effort of individuals who network
and pool their money, usually via the Internet, to support efforts initiated by
other people or organizations. Crowdfunding is used in support of a wide
variety of activities, including disaster relief, citizen journalism, support
of artists by fans, political campaigns, startup company funding, motion
picture promotion, free software development, inventions development,
scientific research, and civic projects. [2]
[Fig.]
Sep.2012, Money from the Crowd,
Crowdfunding
alternatives / sites
I have
recently come across a Crowdfunding platform operating in Australia, named Pozible. Pozible is a Crowdfunding platform
and community-building tool for creative projects and ideas. It was developed
to help people raise funds, realise their aspirations and make great things
possible. Crowdfunding with Pozible is a way for motivated makers to access
funding beyond ‘official’ channels by talking directly to switched-on
consumers, fans, peers and like-minded strangers. Whether you’re a part-time
photographer, aspiring illustrator, avant-garde kazoo virtuoso or
app-developing wizard, you can host your project on Pozible. I liked the
concept, the overall look and feel of their site, as well as the fact they were
recently reaching out to the Universities R&D (research and development)
community.
[Fig.]
The power of Crowds
Like
Pozible, there are numerous others, incorporating various features and
novelties, that could make them stand out, and reach their audience. Probably
the hottest Crowdfunding site on the Internet is Kickstarter, which raised a total of
$220 million from 61,000 launched projects so far. Thousands explore its listed
projects every second waiting to give away their money to the project they
think is most deserving. Kickstarter accepts all major kinds of creative
projects but not for causes or awareness campaigns, charity or scholarships,
and definitely not for vacations or a new digital camera. The submission
process is really intuitive and straightforward, you just need to sign up an
account, then fill out your project details. You are encouraged to describe
everything in great detail, as there will be crews reviewing your form and
determining whether to accept your project or not.
[Fig.]
JUNE 2013 ISSUE OF INC. MAGAZINE
Indiegogo, Bolstr,
Fundable ; the list goes on. With the
SEC poised to allow projects to offer equity, Crowdfunding has the potential to
revolutionize how entrepreneurs raise money. (For now, you have to offer some
kind of reward in exchange for donations.) But all sites are not created equal.
Some specialize in nonprofits, or in certain types of products; others offer
consulting services in addition to sourcing funding. In an increasingly crowded
and complicated marketplace, where should you turn to fund your endeavor ?
Follow the supplied map on the figure above. [3]
[Fig.]
Want to give crowdfunding a try, but
not sure where to start ? ideacrossing.org have put together a quick cheat
sheet to help you navigate which crowdfunding site might be best for you.
Notable
also is GoFundMe, where the fundraisers
get their cash as it comes in ; no need to wait to reach a predetermined goal
like Kickstarter. The company is filling yet another unexpected niche in the burgeoning
crowdfunding industry. Launched in May 2010 and based in San Diego, CA,
GoFundMe has quickly become the #1 crowdfunding website in the world for
personal causes and life-events. Hundreds of thousands of people have raised
over $130M for the things that matter to them most. GoFundMe users can choose
to create a) Personal Donation Campaigns, b) Charity Fundraising Campaigns or
c) All-or-Nothing Crowdfunding Campaigns.
Since the
list of Crowdfunding platforms / sites increases each month, it is rather
pointless to list them all here. However at the end of this article, please
find locations / other articles that attempt to list or group all these
available sites out there.
Start a
Crowdfunding site
You can now start your OWN Crowdfunding site. Get
a white label crowd funding site set-up and ready to accept payments in two
minutes with CrowdfundHQ.
Shaping a
new Economy
Crowdfunding
is there “to bring your product from fruition to completion”. Crowdfunding has
revitalized the Arts at a time when public programs that support it are
steadily dying off. Crowdfunding is growing a market for impact investing in
social enterprises, marrying the worlds of entrepreneurship and philanthropy,
and helping a broader base of investors to back companies for both profits and
purpose. Crowdfunding is accelerating angel investing and creating an entirely
new market for investment Crowdfunding for businesses. So get involved and join
a Crowdfunding community today. You’ll make a difference for a project or
business owner, and also help build a new and more collaborative economy. [4]
“This has
been an age of angels stepping up to fill the voids left by bank loans and VCs
that were decimated by the financial crisis,” said David Drake, a Partner with
LDJ Capital in New York. “Angels stepped in to fill the gap and now
crowdfunding, which we estimate will hit $6 billion globally in 2013, is the
new kid on the block.” [5]
[4] Ref. http://www.forbes.com/sites/chancebarnett/2013/05/08/top-10-crowdfunding-sites-for-fundraising/
Lists of Crowdfunding platforms, available on the
Internet :
(per funding method) http://www.entrepreneur.com/article/228534
Global 100 Crowdfunding Index,
http://crowdfundingpr.wordpress.com/2013/06/12/crowdfunding-press-center-releases-the-first-global-100-crowdfunding-site-index/
Top 100 Crowdfunding Sites for
Equity-based, Rewards-based, Perks-based and Donation-based Fundraising
Campaigns, http://crowdfundingpr.wordpress.com/2013/06/02/top-ranked-crowdfunding-sites-for-rewards-based-perks-based-and-donation-based-fundraising-campaigns/
Top Crowdfunding success
stories (to jumpstart your appettite) :
check out this assortment of
logos http://www.crowdsourcing.org/cfsurvey4Q2011
2011 Crowdsourcing Industry
Landscape http://www.crowdsourcing.org/document/december-2011-crowdsourcing-industry-landscape-download-version/9664
Other resources :
Crowdsourcing, http://en.wikipedia.org/wiki/Crowdsourcing
Comparison of Crowdfunding
services, http://en.wikipedia.org/wiki/Comparison_of_crowd_funding_services
Daily Crowdsource is the #1
source for crowdsourcing related news, http://dailycrowdsource.com/
IdeaCrossing, https://www.ideacrossing.org/default.aspx
US Crowdfunding Legislature http://www.crowdfunder.com/p/crowdfunding-law/
Crowdfunding Infographic, The
JOBS Act Explained, http://thesoholoft.com/2013/01/15/crowdfunding-infographic-%E2%80%93-the-jobs-act-explained2/
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