Five years ago crowdfunding was virtually unknown. Today millions of people have used this means of marketing their ideas to a vast network of people worldwide. The US Jobs Act of 2012 allowed more access to investments for individuals with fewer restrictions, thus increasing the crowdfunding opportunities and turning this into an industry worth billions.Although the SEC is yet to publish rules enabling US investment based crowdfunding, companies such as RocketHub are working with them to make this a reality.
In 2015 crowdfunding is regarded as a viable way of getting any new project off the ground and there are millions of examples of individuals who have done just that. In her book ‘How to Succeed in 12 Months -Creating a Life You Love’ author Serena Star-Leonard describes how she was able to raise the money in a short space of time to realize her dream of traveling South America making short documentaries.As these type of achievements gain publicity more people are inspired to make their own ambitions a reality.
From small creative projects to huge corporate campaigns, everyone is getting in on the action. The benefits of crowdfunding are not solely financial. The marketing gains are substantial, as is the opportunity to raise the profile of the project initiator. Video games manufacturers are among the many companies raising substantial funds to promote new designs. A striking example of a crowdfunding sucess is the Flint and Tinder company who used this means to promote its quality long-lasting hooded sweatshirt in 2013. They used crowdfunding via Kickstarter to raise over a million dollars in investment and to sell their product to more than a million customers.
Kickstarter is the world’s largest online platform funding creative projects. From a small group wanting $800to produce Macbeth in historic caves in the UK, to Axel looking to raise $180,000 to fund Soundscape modular headphones designed to suit different hearing preferences. This Brooklyn company is the platform for a wide range of projects involving film, music, theater, art and technology. Launched in 2009 Kickstarter has gone on to fund almost 100,000 creative ideas and continues to go from strength to strength.
Another big player in the crowdfunding game is Indiegogo, the largest site for fundraisers. Based in San Francisco they help groups and non-profit making organisations to raise money to fund charities and new businesses. In their own words they ‘activate the global community to make ideas happen.’ Recent projects include the campaign to raise $8 million to restore the Martin Luther King Chapel in Atlanta. Italian filmaker Alessio Constantino is currently using his creative talents to raise money to rebuild a school devastated by the earthquake in Nepal.
So much for the story so far but what of the future? The next phase is likely to see large companies such as Amazon and PayPal weave crowdfunding into their online markets. This would enable individuals to club together to contribute towards funding costly items. Setting up a wedding list in this manner already enables guests to jointly buy expensive gifts or even pay for a honeymoon using websites such as the crowded wedding and honey fund. This method of buying a present which the bride and groom will love is becoming increasingly popular in the digital age.
Big media corporations are starting to see the potential of this form of funding and are looking at ways in which they can use crowdfunding. The opportunities for use in the entertainment industry mean that we are likely to see more of this in the coming years, particularly for independant movie-makers. Both Kickstarter and Indiegogo have already funded oscar winning movies. Inocente won Kickstarter their first academy award following the crowdfunding of $52,527 for the production costs and there is no doubt that this method of raising capital is gaining popularity among film makers.
Web-based entertainment companies already utilizing funds raised via crowdfunding. In 2013 Freddie Wong, the YouTube celebrity, successfully raised the money to produce the series ‘Video Game High School’ by gaining backers through Kickstarter.
The next stage is likely to be more television companies using crowdfunding technology as part of their program making, allowing audiences to become more involved and perhaps to influence story lines. A & E television became the first major network to see the potential when they introduced Project Startup in collaboration with RocketHub.com. They provide a platform for new ideas to be launched on air as well as online, reaching over 100 million viewers worldwide. By telling the stories of successful entrepreneurs they promote innovation and encourage more people to realize their dreams.
Another potential use for crowdfunding is its incorporation into the systems of large online social networks. Redit made failed in their attempt to grow a community which could turn designs and opportunities into a reality, but only because they were so popular that they were unable to keep their promise to support every individual project from design through production to distribution. They were too ambitious for this to become a reality but laid the foundations for others to follow. There is no doubt that in the future there will be many similar communities who will be able to succeed where Redit made did not.
Educational establishments are already investigating the advantages of crowdfunding and realizing that they are in a unique position to benefit.Universities and colleges have reservoirs of untapped intellectual reserves and research facilities. Encouraging the entrepreneurs of the future is a must for universities and now there is a way in which students can be enabled to create more opportunities for development.Other ways in which crowdfunding can be utilized within education include matching students more appropriately to available internships and mentors. The possibilities are endless and colleges are starting to grasp the opportunities which are available.
Crowdfunding is here to stay and large organizations are waking up to the realization that they need to get on board or be left behind. Government agencies too are keen to be involved in the future direction of what is now becoming an acceptable, viable means of raising funds and realizing original ideas.