Wednesday, April 8, 2015

The Power and Importance of Crowdfunding in the 21st Century




If you have a fantastic idea for a business and are not independently wealthy, then what do you do? Based on existing models, your best bet is to find a number of investors that are willing to provide the capital necessary for you to get your feet off the ground. The downside is that you have less of a say in what happens to your business as private investors will push towards turning a profit over your business plan.

In the past decade, this well-established model is no longer the only option if you are looking to raise money. Crowdfunding through online websites has become big, allowing for countless individuals to invest small amounts of money. Let’s take a moment to review the power of crowdfunding, the current size of the industry, and some of the campaigns that have achieved success through crowdfunding.

The Industry of Crowdfunding

According to the World Bank, by 2025, the crowdfunding industry will have between $90 to $96 billion dollars invested in it. In 2013, there was $5.1 billion, with $2.7 billion invested in 2012. What these numbers show is very clear. The industry of crowdfunding is expanding at an incredible rate. Based off of the idea that individuals can provide just a little capital towards ideas, products, and business models that they believe in, crowdfunding is growing in popularity and using social media to get the message across.

Industry Leaders

Kickstarter__Indiegogo_LogosTwo major players and industry leaders for crowdfunding are Kickstarter and Indiegogo. Kickstarter has strict guidelines and exists for creative projects looking to raise capital for their ideas. Indiegogo also allows creative projects, as well as fundraising for pretty much everything. In addition, they have recently expanded their international markets and have seen strong growth.

Crowdfunding campaigns

While the above two industry players account for a good amount of the current market in crowdfunding, more than a dozen additional companies help to provide a fundraising model for every kind of need. Through these sites, there have been a number of success stories ranging in the 5 and 6-figure range. Having earned six figures through crowdfunding, Oliver Apparel only ended up putting in $5,000 of their own money. In addition, My Yoga Pro is a good example of a five-figure going on a six-figure campaign that started small and has a great number of backers. Through these success stories and more, crowdfunding is the perfect way to move forward with a fantastic idea and business plan.

Author: Jimmy Newson

Source : jimmynewson.com

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