They say it takes a village to fund a project. Or something along those lines.
The big thing in innovation these days is crowdfunding, a means of raising money for projects by asking people to donate (and offering rewards in return.) What better time for something like crowdfunding than the era in which everyone with a blog is a writer and everyone with a phone is a photographer? Now, everyone who spares even just a couple dollars for an idea can be an innovator or stockholder (and the stakes are lower.)
Crowdfunding is so much a social thing, and it works so well because of one other social thing: Social media. With just a Tweet or Pin, you can turn hundreds (or thousands) of followers into donors.
But why is crowdfunding so important?
When trying to fund a project, your options are asking rich people for lots of money, having wealthy sponsors, or selling something to the public (the latter of which is crowdfunding.) With the Internet, mobile connectivity, and social media comes stronger connections to people around the world, and your audience (and consumers) becomes more widespread (more money, maybe fewer problems?) So why not allow them to participate in your business, a business that they will probably be paying for if it’s successful anyway? The point is accessibility: you’re opening up avenues to the world, instead of limiting them to the upper echelons, and when your project launches, it’ll hit the ground running.
And remember when I wrote about viral campaigns? What if one person donates $10, and convinces 10 of their friends to donate $10 each? That’s $110 and you only had to convince one person.
For people planning on donating to crowdfunding projects, it is not quite the same as buying stock in a company: you pledge to pay an amount of money for an idea that has not yet been launched, and you get some sort of reward in return. If the project cannot reach a certain goal, depending on the platform used for funding, you may not be charged at all and the project may not be funded. Different platforms have different rules for distributing pledged funds. Crowdfunding campaigns fall into one of three types: donation, lending, and investment.
Because I know you want to start a crowdfunding campaign right now, here are 10 websites to look at:
Or if you’re feeling generous, donate to our crowdfunding project for the 5th Annual Global Innovation Forum!