Crowdfunding has become the go-to-system for individual entrepreneurs, writes social media commentator Lucy Birchley. So what exactly is this form of financing which can turn both great – and occasionally terrible – ideas into reality.
Have you ever had a brilliant idea but known in your heart that convincing your bank manager to finance it might be harder then climbing Everest? Well, don’t put your dreams of owning a Cat Café or starting a toddler fashion line in a draw just yet. Instead enter the world of crowdfunding.
For the uninitiated the idea is simple – an entrepreneur, inventor or group create a page about their project on the crowdfunding platform of their choice and ask patrons to give small (or large amounts) of money to help the product reach its next stage of development. The projects can be almost anything – from a home business entrepreneur seeking funds for expansion to a community funding a lunar mission (this one is literally happening right now.)
The great thing about crowdfunding versus traditional finance is that all patrons who contribute to the project are offered ‘rewards’ for their donation, usually in line with the value of the contribution, and are able to take home something that reaffirms the positive feelings they gained by helping someone else achieve their dreams.
That said crowdfunding is not all sunshine and unicorns. Like any finance model there are costs associated with it that might outweigh its benefit to your cause.
For example, some platforms won’t actually give you the promised donations unless you reach your funding goal. Even a few dollars out and you lose the lot. Or it may be there’s a need to spend money up front on videos, advertising or social media campaigns to help your cause stand out from the literally thousands of other projects seeking funding.
Personally I love crowdfunding, and wait eagerly each month for email updates from websites like Pozible, Indiegogo and Kickstarter to see what new and inspiring projects people from all over the world are funding.To me it’s a sort of mixture of discovery, invention and human ingenuity, unrestricted by standard financing practises or high-risk investments. Forget needing a wealthy patron or a loan from a bank, modern artists, investors and farmers can now get funding from ten or thousands people who then get to watch or participate in seeing the project come to life as part of their ‘reward’.
If Thomas Edison, Leonardo da Vinci or Shakespeare were working in our post GFC landscape, I think it would be safe to say they would be crowdfunding.
So do your research – look into every different kind of crowdfunding that exists, because there is almost bound to be a model that suits your bright idea – and who knows, if your idea is bright enough, the sky may well be the limit.
Here are five great crowdfunding ideas:
Hemingway’s Hamburgers – A Cookbook Of Writer’s Recipes https://www.kickstarter.com/projects/gainsayerpress/hemingways-hamburgers-a-cookbook-of-writers-recipe?ref=category_recommended
Give a Cluck Free Range Eggs – http://www.pozible.com/project/200042
Whilst, as a social media commentator, I don’t really want to pour scorn on any idea, I did think this one was worth pointing out for its amusement value: