There has been a lot of discussion around crowdfunding. Even the mainstream media is talking about it a lot these days after some guy decided to ask for $10 just for kicks and ended up getting more than $50,000 to make potato salad.
Setting aside all the nonsense about potato salad, there is a real point to be made here: Crowdfunding potential is truly limitless. Even before the potato salad story had hit the news, I had been really digging into this whole crowdfunding scene. That’s why I had decided to dedicate the whole month of July on The Peggy Smedley Show, www.peggysmedleyshow.com to this very subject. My research so far has been truly fascinating as I have discovered organizations like Kickstarter and Indiegogo are leading the charge and are very influential in helping tech innovators bring their creative ideas to production or to market.
Let’s talk real numbers. According to Massolution’s 2013 crowdfunding industry report, donation and reward grew 85% to $1.4 billion between 2012 and 2013. During that same period, lending grew 111% to $1.2 billion and equity climbed 30% to $116 million. These are big numbers.
Using Kickstarter, Indiegogo, and others are giving people a chance to take their product to the people and letting them determine if a product or solution is truly worthy of being something useful.
People want to forgo the traditional route of knocking on doors and trying to land face-to-face meetings with potential investors.
So what exactly is crowdfunding any way? By definition, crowdfunding is the “The practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet.”
Any type of person or organization can go the route of crowdfunding. This can be a non-profit, charitable organization, start-up, artist, and musician, you name can bring a product, service, or idea.
As I said earlier, while many people have given up on the traditional way of seeking investors, crowdfunding really isn’t new. In fact, its roots can be traced as far back as 1713. Alexander Pope was looking to translate Homer’s Illiad from Greek into English, and set out to find people to support him. In exchange for their assistance, he offered acknowledgements in the book, a copy of the book, and a good feeling of helping out another person. Some 750 people stepped up helping Pope giving birth to the first real crowdfunding effort. Ironically, it’s only recently crowdfunding has come into its own and people are seeing its real value.
Let’s go back to the Massolution’s report again as it states $2.7 billion was raised by more than 1 million campaigns in 2012, which ironically was an 81% increase from the year before. Looking ahead that means the total amount raised could hit more than $5 billion when this firm completes its 2013 review.
What this tells me is the opportunities for crowdfunding are endless. We are only limited by our imagination, thus the making and raising of funds for potato salad truly a reality.
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