So, Is crowdfunding just another technology bubblegum that will inflate, pop and leave residue on your face?
Let’s take a gander…
It is the use of small amounts of capital from a large number of individuals to finance a new business venture.
Most of these ventures are cooler than a frigid winter night in Manitoba.
Crowdfunding makes use of the easy accessibility of vast networks of friends, family and colleagues through social media websites like Facebook, Twitter and LinkedIn to get the word out about a new business and attract investors.
It has the potential to increase entrepreneurship by expanding the pool of investors from whom funds can be raised beyond the traditional circle of owners, relatives and venture capitalists.
Famous crowdfunding platforms like kickstarter and Indiegogo attract investors by giving various incentives and ensuring quality checks during the crowdfunding process. So not every Tom, Dick and Harry make millions just waiting for investors to give them their hard earned cash.
How do these platforms work?
According to a famous business advisory advice website - many of these sites can allow individuals to set up fundraising pages on behalf of charities they want to support.
Others will allow your non-profit to set up a master page for your campaign and then allow your supporters to set up tangential pages that they can use to get their friends and colleagues to donate a portion of the goal of your master campaign.
But that's not the whole picture. The Independent claims that:
“Crowdfunding sites work best for funding specific projects or campaigns, and do not work well for general fundraising or things like annual giving. Some of the above listed sites work well for raising money through events, as do event-specific websites such as EventBrite. 56.13 per cent of all projects "fail" on Kickstarter (which is about the same rate across all crowdfunding websites). But Kickstarter doesn't index these failed projects – that is, they are hard to find both on search engines and on the site itself. Why? According to Kickstarter's hello/hi team, this is because the creators of such projects don't want their failed projects popping up when you search for their name and requested that they be de-indexed.”
Well, life is just a bowl of soup and you get noodles rarely in it if any!
What are some of the famous names in crowdfunding?
Kickstarter: A haven for emerging artists, Kickstarter is fast becoming a platform for entrepreneurs to finance innovative new products. The site has seen more than 13,000 successful campaigns since its launch in 2009.
Indiegogo: Founded in 2008, IndieGoGo takes an anything-goes approach. As long as the project is neither pornographic nor illegal, it's accepted. "We're open to any campaign, any idea, anywhere in the world," says co-founder Slava Rubin.
Profounder: Co-founded by Jessica Jackley, one of the brains behind the peer-to-peer microlending platform Kiva, ProFounder helps startups launch private rounds of crowdfunding. Investors get equity or a percentage of revenue over a set period of time.
Your money can help fund:
A new kind of beef jerky,
Heck, even Super Troopers 2 used a crowd funding vehicle to raise money for the filming and production of the movie.
Wrapping up, you pitch a startup, ask for seed funding and then party all night long with the money!
If you have a cool idea, need money for your startup, crowdfunding platforms may prove a viable source to get rolling. Just make sure to have the right writer, some cool videos and know how to sell your product.