Gone are those days when people strangled their genius business ideas, locked their creative insights, suppressed their adept skills because they had no capital for dream investments. Artists have gone unnoticed, thought provoking movies have failed to taste the flavor of 70 mm screen, revolutionary social campaigns took a halt before the evolution of a game changing idea of crowdfunding.
The preliminary glimpses of the fundraising concept could be seen in late years of 19th century when Joseph Pulitzer, a newspaper publisher urged the American denizens to donate money for the Statue of Liberty’s pedestal through New York world, an English daily newspaper because the American committee was left with no funds. Within six months, amount over $100,000 was raised and more than 125,000 people joined hands for the cause. Since then, many such cases came to life where uncountable people gathered to support a cause or to give wings to some brilliant ideas.
Over the years, the trend of crowdfunding has grown exponentially, encouraging people across the globe to invest in distinct projects. The idea went viral on the internet after the writer/ director, Mark Tapio Kines gathered more than $125,000 over the Internet for his first feature presentation, Foreign Correspondents. With the passage of time, the concept of crowdfunding websites gained momentum, bringing some top-notch players into notice and providing a one for all platform for fundraising.
Some websites restricted their target groups and some of them shared the space with the world. This means, few of the websites like Kickstarter, dedicated themselves solely to the creative projects whereas others like Gofundme opened the gateway for every kind of project, be it the handsome donations for charity, substantial amount for businesses or any vague campaign in the sphere.
These major players received extensive response from the people eying such support and with the rise of investors, the idea got clicked and made these websites the hotspot of the crowdfunding platform.
Star Citizen, one of the renowned projects of the contemporaries is an online space trading and combat video game. Developed by Chris Roberts and Cloud Imperium Games, the project has received the highest funding till date, which comes out to be $40,000,000. This collection has defeated the Pebble Watch project which had accumulated the funds worth $ 10,266,844. The fund seeking entrepreneurs or other entities are now projecting themselves on these crowdfunding websites with informative and appealing campaigns.
The strategic campaigns play a crucial role in attracting investors, the way of projecting the ideas and marketing the campaigns is extremely essential. Campaigners tell their stories through these platforms, attract the contributors with the perks and share their campaigns worldwide through friends, colleagues and social media.
There is a dark side of the story too, not forgetting the loopholes in the process crowdfunding. When an investor signs up to any of such websites he becomes a “shareholder” but is not given typical shareholder rights. Presently, the majority of websites offering crowdfunding service are not FSA authorized providing little or no protection to the investor. In fact if interested, the investors should be vigilant while choosing the projects. Irregularities in the Kobe Beef Jerky project has alerted the investors, the fake product pulled $120,000 through the renowned crowd funding site, Kickstarter.com but just before the release the issue came to light.
The risks involved in this process are high and dangerous, that’s why the Better Business Bureau elucidate crowdfunding as the “wild west of fundraising.”