Crowdfunding

4 Ways to Organically Reach More Donors through Medical ...

src: www.the-world-in-focus.com

Crowdfunding is the practice of funding projects or businesses by collecting small amounts of money from large numbers of people, usually over the Internet. Crowdfunding is a form of crowdsourcing and alternative finance. By 2015, the worldwide estimate of more than US $ 34 billion is raised by crowdfunding.

Although similar concepts can also be run through mail-order subscriptions, benefit events, and other methods, the term crowdfunding refers to an Internet-mediated registrant. This modern crowdfunding model is generally based on three types of actors: a project initiator who proposes an idea or project to be funded, an individual or group that supports an idea, and a moderator organization ("platform") that unites all parties to launch the idea.

Crowdfunding has been used to fund various benefits, entrepreneurial ventures such as artistic and creative projects, medical expenses, travel, or community oriented social entrepreneurship projects. Some requests, such as to pay for optional fees, such as holidays, weddings, or cosmetic surgery, are widely derided as internet begging or cyberbegging.

Video Crowdfunding

Histori

Crowdfunding has a long history with several roots. Books have been deceived for centuries: authors and publishers will advertise book projects in pre-populations or subscription schemes. This book will be written and published if enough customers indicate their readiness to buy the book once it's out. The subscription business model is not exactly crowdfunding, since the actual money flow only begins with the arrival of the product. But the subscriber list has the power to create the necessary confidence among investors that is necessary to risk publishing.

The war bonds are theoretically a form of a crowdfunding military conflict. The London trading community saved the Bank of England in the 1730s when customers demanded their pounds to be converted into gold - they supported the currency until confidence in the pound was restored, thus crowdfunded their own money. A clearer case of modern crowdfunding is the Auguste Comte scheme to issue notes for public support for later work as a philosopher. The "PremiÃƒÆ'Ã‚Â¨re Circulaire Annuelle adressÃƒÆ' Ã‚ Â© e par l'auteur du SystÃƒÆ'Ã‚Â¨me de Philosophie Positive " was published on March 14, 1850, and some of these records were empty and with survivors. The cooperative movements of the 19th and 20th centuries are wider precursors. This results in a collective group, such as community or interest-based groups, collecting subscribed funds to develop new concepts, products and means of distribution and production, particularly in rural areas of Western Europe and North America. In 1885, when government sources failed to provide funds to build a monumental base for the Statue of Liberty, the newspaper-led campaign attracted a small donation of 160,000 donors.

Crowdfunding on the internet was first popular and used generally in the arts and music community. The first important example of online crowdfunding in the music industry was in 1997, when underwrote enthusiasts throughout the US tour for the British rock band Marillion, garnered a $ 60,000 donation through a fan-based internet campaign. They then use this method to finance their studio albums. In the film industry, independent author/director Mark Tapio Kines designed a website in 1997 for his first unfinished feature film Foreign Correspondent . In early 1999, he had collected over $ 125,000 on the Internet from at least 25 fans, giving him funds to complete his film. In 2002, the campaign "Free Blender" was the beginning of the predecessor crowdfunding software. The campaign aims to unlock the 3D Blender computer graphics software by collecting $ 100,000 from the community while offering additional benefits to donate members.

Crowdfunding began to gain major traction with the launch of ArtistShare (2003). As the model matures, more crowdfunding sites begin to appear on the web such as Kiva (2005), IndieGoGo (2008), Kickstarter (2009), GoFundMe (2010), Microventures (2010), and YouCaring (2011).

The crowdfunding phenomenon is older than the term "crowdfunding". According to wordspy.com, the earliest use of the word was recorded in August 2006.

Maps Crowdfunding

Type

The May 2014 Crowdfunding Center Report identifies two main types of crowdfunding:

The crowdfunding set: an entrepreneur presents a product or service to launch a business concept without incurring debt or sacrificing equity/stock.
Crowdfunding Equity: supporters receive company shares, usually in the initial stages, instead of promised money.

Reward based

Crowdfunding-based gifts have been used for a variety of purposes, including movie promotion, free software development, discovery development, scientific research, and civil projects.

Many prize-based crowdfunding characteristics, also called non-equity crowdfunding, have been identified by research. In prize-based crowdfunding, funding does not depend on location. The distance between the makers and investors in Sellaband is about 3,000 miles when the platform introduces royalty sharing. Funding for these projects is distributed unevenly, with several accounting projects for most of the overall funding. In addition, funding increases as the project approaches its objectives, prompting what is called "herding behavior". Research also shows that friends and family are responsible for most, or even most, part of the initial fundraising. This capital can encourage the next funder to invest in the project. Although funding does not depend on location, observations indicate that funding is largely related to the location of traditional financing options. In prize-based crowdfunding, funders are often too hopeful about project returns and should revise expectations when returns are not met.

Equity

Crowdfunding equity is an individual collective effort to support initiatives initiated by other people or organizations through the provision of finances in the form of equity. In the United States, the laws mentioned in the 2012 JOBS Act will allow a wider set of small investors with fewer restrictions after the implementation of legislation. Unlike the lack of crowdfunding, crowdfunding equity contains an increasing "information asymmetry". Creators must not only produce the products they produce capital, but also create equity through the development of the company. Crowdfunding equities, unlike donations and prize-based crowdfunding, involve securities offerings that include potential returns on investment. Syndicates, involving many investors following a single major investor strategy, can be effective in reducing information asymmetry and in avoiding market failure results associated with equity crowdfunding.

Software value token

Another type of crowdfunding is raising funds for projects where digital value tokens or software are offered as gifts to funders known as Initial Coin Offers (abbreviated as ICO). Endogenous value tokens are created by certain open decentralized networks that are used to push client computers from the network to deplete scarce computer resources on network maintenance protocols. This value token may or may not exist at crowdsale, and may require substantial development effort and final software release before the token is live and establish a market value. Although funds can be collected only for the token value itself, funds collected at blockchain based crowdfunding may also represent equity, bonds, or even "market-maker seats of governance" for funded entities. Examples of such crowdsales are the decentralized Augur, distributed predictive market software that increases US $ 4 million from more than 3500 participants; Ethereum blockchain; Digix/DigixDAO; and " The DAO ." Some of the biggest toy crowdsales in 2017 were Tezos who collected US $ 232 million , Bancor which boosted US $ 153 million and Status that increases US $ 102 million .

Debt based

Crowdfunding debt-based (also known as "peer to peer", "P2P", "marketplace lending", or "crowdlending") emerged with the establishment of Zopa in the UK in 2005 and in the US in 2006, with the launch of Loan Club and Prosper. com. Borrowers apply online, are generally free, and their apps are reviewed and verified by an automated system, which also determines borrower and interest rate credit risk. Investors buy securities in funds that make loans to individual borrowers or collection of borrowers. Investors make money from interest on unsecured loans; the system operator makes money by taking a percentage of the loan and the cost of loan repayment. In 2009, institutional investors entered the arena of P2P loans; for example in 2013, Google invested $ 125 million in Lending Club. In 2014 in the US, P2P loans amount to about $ 5 billion. In 2014 in the UK, the P2P platform lends businesses up to Â£ 749 million, growth of 250% from 2012 to 2014, and lends retail customers Ãƒ, Ã‚ Â£ 547 million, 108% growth from 2012 to 2014. In both countries by 2014, about 75% of all money is transferred through crowdfunding via the P2P platform. Lending Club became public in December 2014 with a valuation of approximately $ 9 billion. Crowded debt in the US is growing further with the enactment of Title III of the JOBS Act of 2016, enabling unaccredited investors to invest directly in private businesses through the Regulated Funding Portal or Broker-Dealers.

Litigation

Crowdslunding litigation allows plaintiffs or defendants to reach hundreds of their colleagues simultaneously in a semiprivate and secret way to obtain funding, whether seeking donations or rewards in return for funding. It also allows investors to buy shares in claims that they have funded, allowing them to recover more of their investment if the case is successful (prizes are based on compensation received by the plaintiff at the end of his case, known as contingent fees in the United States, cost success in the United Kingdom, or pactum de quota litis in many civil legal systems). LexShares is a platform that allows accredited investors to invest in lawsuits.

Donation based

Walking with gift-based, donation-based crowdfunding is the second most used in crowdfunding. Donations based on charitable donations are individual collective efforts to help charitable causes. In a crowdfunding charity, funds are pooled for pro-social or pro-environmental purposes. Donors come together to create an online community around common causes to help fund services and programs to address problems. The main aspect of donors is that there is no reward for donations, but based on the altruistic reasoning that the donor has.

5 Steps to Crowdfunding Success - BPlan Experts

src: www.bplanexperts.com

Roles

The input of the individual in the crowd triggers the crowdfunding process and affects the final value of the offer or the outcome of the process. Each individual acts as an offering agent, choosing and promoting a project they believe in. They sometimes play a donor-oriented role of providing assistance to social projects. In some cases, they become shareholders and contribute to the development and growth of supply. Individuals disseminate information about the projects they support in their online communities, resulting in further support (promoters). The motivation for consumer participation comes from feeling at least partly responsible for the success of other people's initiatives (the desire for patronage), striving to be part of the communal social initiative (the desire for social participation), and seeking out the results of a monetary contribution (the desire for investment). In addition, individuals participate in crowdfunding to see new and innovative products before the public. Initial access often allows funders to participate more directly in product development. Crowdfunding is also very attractive to funders who are the family and friends of a creator. This helps mediate the terms of their financial agreement and manage the expectations of each group for the project.

An individual who takes part in the crowdfunding initiative tends to reveal several different traits: an innovative orientation, which stimulates the desire to try new modes of interacting with other companies and consumers; social identification with the content, cause or project chosen for funding, which sparked a desire to be part of the initiative; (monetary) exploitation, which motivates individuals to participate by expecting results. The crowdfunding platform is motivated to generate revenue by drawing beneficial projects and generous philanthropists. These sites are also seeking broad public attention to their projects and platforms.

The crowdfunding website helps companies and individuals worldwide collect US $ 89 million from community members in 2010, $ 1.47 billion in 2011, and $ 2.66 billion in 2012 - $ 1.6 billion of 2012 grew up in North America. In 2012, more than one million individual campaigns are established globally and the industry is projected to grow to US $ 5.1 billion by 2013 and reach US $ 1 trillion by 2025. The May 2014 report, released by the UK-based Crowdfunding Center. and entitled "Country of Crowdfunding Nation", presents data showing that during March 2014, over US $ 60,000 was raised hourly through the global crowdfunding initiative. Also during this period, 442 crowdfunding campaigns were launched globally every day.

src: i.ytimg.com

Platform

In 2012, there are over 450 crowdfunding platforms in operation. By 2015 it is estimated that there will be more than 2,000 crowdfunding sites to choose from by 2016. Project creators need to do their own due diligence to understand which platform is best to use depending on the type of project they want to launch. The fundamental difference lies in the services provided by many crowdfunding platforms. For example, CrowdCube and Seedrs are Internet platforms that allow small companies to publish shares through the Internet and receive small investments from registered users in return. While CrowdCube is meant for users to invest in small amounts and acquire shares directly in startup companies, Seedrs raise funds to invest in new businesses, as nominated agents. Other popular crowdfunding platforms open to the public to use for their personal and professional needs are Kickstarter and GoFundMe.

The curated crowdfunding platform serves as a "network orchestra" by curbing allowed bids on the platform. They create the system and organizational conditions necessary for resource integration among other players to take place. Relational mediators act as intermediaries between supply and demand. They replace traditional intermediaries (such as traditional record companies, venture capitalists). The platform connects new artists, designers, project proponents with committed supporters who believe in people behind the project strong enough to provide monetary support. Machine growth focus on strong inclusion of investors. They are "disintermediate" by eliminating activity from service providers who were previously involved in the network. The crowdfunding platform seeks stocks from a high-value private investor community and matches them directly with project proponents.

Iranian Crowdfunding Platforms Raised $250k in Total - TechRasa

src: techrasa.com

Campaign significant

Initial campaign

The Professional Contractors Group, a trade body representing freelancers in the UK, collected Ãƒ, Ã‚ Â£ 100,000 over a two-week period in 1999 from some 2000 freelancers threatened by a Government measure known as IR35. In 2004, Electric Eel Shock, a Japanese rock band, garnered Ãƒ, Ã‚ Â£ 10,000 from 100 fans (Samurai 100) by offering them a lifetime membership on the band's guest list. Two years later, they became the fastest band to raise the $ 50,000 budget on SellaBand. Franny Armstrong then created a donation system for her film The Age of Stupid . For five years, from June 2004 to June 2009 (release date), he collected Ãƒ, Ã‚ Â£ 1,500,000. In December 2004, French businessmen and producers Benjamin Pommeraud and Guillaume Colboc launched a public Internet donation campaign to fund their short science fiction film, Demain la Veille (Waiting for Yesterday) . Within a month, they managed to collect EUR17,000 online, allowing them to shoot their movie.

Highest best-selling campaign

By 2015, the highest funding reported by the crowdfunded project to date is Star Citizen , online space trading and combat video games developed by Chris Roberts and Cloud Imperium Games; had collected $ 77 million at the time, and while it had a loyal fan base, it was also criticized for potentially fraud.

$ 35 million worth of Brave Token Primary (BAT) sold out in less than 30 seconds.

Kickstarter Campaign

On April 17, 2014, the Guardian media outlet published a list of the "20 most significant projects" launched on the Kickstarter platform before the publication date:

Amanda Palmer musicians raised US $ 1.2 million from 24,883 supporters in June 2012 to create new albums and art books.
"Coolest Cooler" garnered a total of $ 13,285,226 from 62,642 supporters. This cooler comes with a blender, waterproof Bluetooth speaker and LED light.
Zack Brown collected $ 55,000 from over 6,900 supporters in September 2014 to make a bowl of potato salad. Noteworthy is that the initial target was only $ 10, but his campaign became viral and got a lot of attention. Brown finally held a potato salad party with over 3,000 pounds of potatoes.

How Crowdfunding Has Changed the Startup Game

src: singularityhub.com

Apps

Crowdfunding is being explored as a potential funding mechanism for creative work such as blogging and journalism, music, independent film (see crowdfunded film), and for startup company funding. Community music labels are usually nonprofit organizations where "fans perceive the traditional financial roles of record labels for artists they believe to fund the recording process". Since pioneering crowdfunding in the film industry, Spanner Films has published a "how-to" guide. The Financials article published in mid September 2013 states that "the niche for crowdfunding is in financing films with budgets in the range of $ 1 to $ 10 million" and crowdfunding campaigns "are far more likely to be successful if they take advantage of a base existing fans and fill the gaps in the marketplace. "Innovative new platforms, such as RocketHub, have emerged that combine traditional funding for creative work with branded crowdsourcing - helping artists and entrepreneurs unite with the brand" without need of a middle man. "

Food and agriculture

Several crowdfunding platforms have emerged that allow people to donate or invest in food and agricultural related opportunities. AgFunder is one of the global platforms that gives individual investors and institutions access to venture capital investment, both in agricultural technology and food technology companies. Cropital has developed a platform to enable investors to invest in small farmers, and gift-based platforms such as Barnraiser allow users to support farmers and food companies.

The crowdfunding platform PieShell was launched in 2016 to focus exclusively on food and beverage campaigns.

Philanthropy and Civil Project

Various crowdfunding platforms have emerged to allow ordinary web users to support certain philanthropic projects without requiring large amounts of money. GlobalGiving allows individuals to browse through the selection of small projects proposed by nonprofits around the world, donating funds for projects of their choice. The crowdfunding microcredit platform such as Kiva (the organization) facilitates the crowdfunding of loans managed by microcredit organizations in developing countries. US-based Zidisha nonprofit applies a person-to-person loan model for microcredit to low-income small business owners in developing countries.

DonorsChoose.org, founded in 2000, allows public school teachers in the United States to request materials for their classes. Individuals can lend money to projects proposed by teachers, and organizations meet and deliver supplies to schools. There are also a number of university's crowdfunding websites, allowing students and staff to create projects and receive funding from university alumni or the general public. Several dedicated community crowdfunding platforms have appeared in the US and the UK, some of which have led to the government's first direct involvement in crowdfunding. In Britain, Spacehive is used by the Mayor of London and Manchester City Council to finance civilian projects created by citizens. Similarly, a dedicated humanitarian crowdfunding initiative emerged, involving humanitarian organizations, volunteers, and support in solving and modeling ways of building innovative crowdfunding solutions for the humanitarian community. Likewise, international organizations such as the Office for the Coordination of Humanitarian Affairs (OCHA) have researched and published on the topic.

One of the crowdfunding projects, iCancer, is used to support the Phase 1 trial of AdVince, an anti-cancer drug by 2016.

Real estate

Crowdfunding real estate is the online capital pooling of investors to finance real estate secured mortgages, such as "fix and reverse" redevelopment of depressed or abandoned properties, equities for commercial and residential projects, acquisition of depressed mortgage pools, down payment on home buyers and similar real estate related outlets. Investments, through specialized online platforms in the US, are generally completed under Title II of the JOBS Act and are limited to accredited investors. This platform offers a low minimum investment, often $ 100 - $ 10,000. There are over 75 platforms of crowdfunding real estate in the United States. The growth of crowdfunding real estate is a global trend. During 2014 and 2015, more than 150 platforms have been created worldwide, such as in China, the Middle East, or France. In Europe, some compare this emerging industry with e-commerce ten years ago.

In Europe the requirements against investors are not as high as in the United States, lowering the barriers to entry into real estate investment in general. Crowdfunding real estate can cover a wide variety of projects ranging from commercial to residential development, opportunity of obtaining planning, continuous building (like social housing) and more. The report from the Cambridge Center for Alternative Finance discusses both crowdfunding real estate and peer 2 peer lending (property) in the UK.

Intellectual property lighting

One of the challenges to post new ideas on crowdfunding sites is that there may be little or no intellectual property protection (IP) provided by the site itself. Once an idea is posted, it can be copied. As Slava Rubin, IndieGoGo's founder, said: "We always ask that all the time, 'How do you protect me from someone who stole my idea?' We are not responsible for those things. "Inventor supporters, such as Simon Brown, founder of the United Innovation Association based in the UK, advise that ideas can be protected on crowdfunding sites through initial submission of patent applications, copyright use and protection trademarks and a new form of protection of ideas supported by the World Intellectual Property Organization called Creative Barcode.

Science

A number of platforms have also emerged that specialize in crowdfunding scientific projects, such as experiment.com, and The Open Source Science Project. In the scientific community, new options for funding research are viewed ambivalently. Crowds for science supporters emphasize that it allows early-career scientists to apply for their own projects from the start, forcing scientists to communicate clearly and comprehensively to the broader public, which can ease the problem of established visible funding systems funding conventional, mainstream projects, and giving the public a voice in science funding. In turn, critics worry about quality control on the crowdfunding platform. If non-scientists are allowed to make funding decisions, it would be more likely that "panda bear science" is funded, ie research with broad appeal but lacks scientific substance. Initial studies found that crowdfunding was used in science, mostly by young researchers to fund a small part of their project, and with a high degree of success. At the same time, funding success seems to be strongly influenced by non-scientific factors such as humor, visualization, or the ease and security of payments.

Journalism

To finance online and print publications, journalists will ask for crowdfunding help. Crowdfunding allows for beginners and small journalists to fund their work without the institutional assistance of large public broadcasters. Stories are promoted publicly using crowdfunding platforms like Kickstarter, Indiegogo, or Spot.us. Funds collected from crowdsourcing can be incorporated into travel expenses or equipment purchases. Crowdfunding in journalism can also be viewed as a way to enable audiences to participate in news production and in creating a participatory culture. While deciding which story to publish is a role traditionally possessed by editors in more established publications, crowdfunding can provide an opportunity for the public to provide feedback on deciding which story to report. This is done by funding certain journalists and pitches. Donating can be seen as an act that "binds" journalists and readers. This is because readers express an interest in their work, which can be "motivating personal" or "satisfying" for journalists.

Spot.us, which closed in February 2015, is a crowdfunding platform that is specifically meant for journalism. The website allows readers, individual donors, registered reporters, or news organizations to fund or contribute talent in the direction of their choice. While funders are not usually involved in editorial control, Spot.us allows donors or "community members" to engage with joint storytelling. This gives them the ability to edit articles, send photos, or share instructions and information. According to an analysis by Public Insight Network, Spot.us is unsustainable for many reasons. Many donors do not return donors and often, projects are funded by family and friends. The overall market for crowdfunding journalism can also be a factor; donations to journalism projects accounted for 0.13 percent of the $ 2.8 billion raised in 2013.

Larger crowdfunding platforms like Indiegogo or Kickstarter, both non-journalistic, can garner more success for projects. This is because this large-scale platform allows journalists to reach new audiences. By 2017, 2.3 million of 7.92 million Kickstarter users have contributed to more than one project.

Traditionally, journalists are not involved in advertising and marketing. Crowdfunding means that journalists attract funders while trying to remain independent, which can lead to conflict. Therefore, being directly involved with the financial aspect can call journalistic integrity and journalistic objectivity into question. This is also due to the fact that journalists may feel pressure or "sense of responsibility" towards the funders who support a particular project. Crowdfunding can also allow the blurring line between professional and non-professional journalism because if enough interest is generated, anyone can publish their work.

International developments

There is hope that crowdfunding has potential as a tool open to use by traditionally marginalized groups of people. The World Bank published a report entitled "The Potential Crowdfunding for the Developing World" stating that "While crowdfunding is largely still a growing world phenomenon, with the support of government and development organizations, it can be a useful tool in developing countries as well.A substantial reservoir of talent entrepreneurship, activity and abandoned capital in many developing countries... Crowdfunding and crowdfund investing have some important roles to play in entrepreneurial ecosystems and financing businesses in the developing world. "

Legal development

As crowdfunding popularity grows, the SEC, state governments, and Congress respond by enforcing and perfecting many capital-raising exemptions to allow easier access to alternative funding sources. Initially, the Securities Act of 1933 prohibited companies from requesting capital from the general public for private offers. However, "President Obama signed our Jumpstart Small Smalles Act (" JOBS Act ") into law on April 5, 2012, which removes a ban on general demand activity for eligible issuers under a new exception called 'Rule 506 (c). ' "A company can now widely request and generally advertise an offer and still comply with the exclusion requirement if:

Investors in the offer are all accredited investors; and
The Company takes reasonable steps to verify that the investor is an accredited investor, which may include reviewing documentation, such as W-2, tax returns, bank statements and brokers, credit reports and the like.

Other amendments are amendments to SEC Regulations 147. Section 3 (a) (11) of the Securities Act allows for an unlimited capital increase of investors in one country through intrastate exemption. However, the SEC created Regulation 147 with a number of requirements to ensure compliance. For example, an intrastate invitation is allowed, but out-of-state bids can destroy the release. In addition, the publisher is required to incorporate and engage in the same state of intrastate offerings. With the expansion of business activities between countries due to the internet, it becomes difficult for companies to comply with exceptions. Therefore, on October 26, 2016 the SEC adopted Regulation 147 (a) which removes many restrictions to modernize the Rules. For example, a company must do business and have a primary business place in the country where the offer is sold, and not necessarily where is offered according to the previous rule.

HOW TO CREATE A SUCESSFUL CROWDFUNDING CAMPAIGN - Crowdfunding ...

src: i.ytimg.com

Benefits and risks

Benefits for creators

The crowdfunding campaign gives producers a number of benefits, beyond strict financial gains. Here are the financial benefits of crowdfunding.

Interesting profiles can raise the profile of producers and give a boost to their reputation.
Marketing - the project proponent can show the audience and the market for their project. In the case of a failed campaign, this provides good market feedback.
Audience engagement - crowdfunding creates forums where project proponents can engage with their audience. Viewers can engage in the production process by following developments through updates from creators and sharing feedback through the comment feature on the project's crowdfunding page.
Input - offering pre-release access to content or opportunities to test beta content to project proponents as part of a funding incentive provides project initiators with instant access to good market test feedback.

There is also a financial advantage for the creator. For one, crowdfunding allows the creator to achieve inexpensive capital. Traditionally, creators need to see "personal savings, home equity loans, personal credit cards, friends and family members, angel investors, and venture capitalists." With crowdfunding, creators can find funders from around the world, sell their products and equities, and benefit from increased information flows. In addition, crowdfunding that supports pre-purchases allows manufacturers to get initial feedback on the product. Supporters of the crowdfunding approach argue that it allows good ideas that do not fit the pattern needed by conventional financiers to break through and withdraw cash through the wisdom of the crowd. If it achieves "traction" in this way, it can not only secure the company's seed funding to start its project, but it can also secure evidence of support from potential customers and benefit from word-of-mouth promotion to achieve fundraising goals. Another potential positive effect is the group's tendency to "produce accurate aggregate predictions" of market outcomes as identified by author James Surowiecki in his book The Wisdom of Crowds, thus putting financial support behind a possible effort.

Proponents also identified the potential for crowdfunding results as an exponential increase in available venture capital. One report claims that If every American family gives one percent of their investable assets to crowdfunding, $ 300 billion (10X increase) will come to venture capital. Advocates also cite that the benefit to companies that receive crowdfunding support is that they retain control over their operations, since voting rights are not conveyed along with ownership when crowdfunding. As part of his response to the Amanda Palmer Kickstarter controversy, Albini expressed his supportive views of crowdfunding for musicians, explaining: "I have said over and over that I think they are part of the bands a new way and their audience interact and they can be a fantastic source , allowing the band to do things that basically work with their viewers. "Albini described the concept of crowdfunding as" simply amazing. "

Risk and obstacles for creators

Crowdfunding also comes with a number of potential risks or obstacles. For creators, as well as investors, research shows that crowdfunding contains "high levels of risk, uncertainty, and information asymmetry."

Reputation - failure to meet campaign objectives or to generate interest in public failure. Achieving financial goals and succeeding in garnering massive public support but not being able to complete a project for some reason can adversely affect a person's reputation.
IP Protection - Many developers of Interactive Digital Media and content manufacturers are reluctant to publicly disclose details of the project before production due to concerns about idea theft and protect their IP from plagiarism. Creators involved in crowdfunding are required to release their products to the public in the early stages of funding and development, exposing themselves to the risk of copy by competitors.
Donor fatigue - there is a risk that if the same support network is contacted repeatedly, the network will eventually stop supplying necessary support.
The public fear of abuse - a concern among supporters that without a regulatory framework, the likelihood of fraud or high misuse of funds. Such concerns may be a hindrance to public engagement.
Lack of participation - It appears that some stories are more likely to be picked up than others based on stories. easy to get support if you "just tell a story." [2]

For crowdfunding purchases of equity shares, there is some research in social psychology which shows that, as in all investments, one does not always do due diligence to determine whether it is a sound investment before investing, leading to investment decision making based on emotion rather than financial logic. By using crowdfunding, the creators also forget the potential support and value that may be offered by a single investor or venture capitalist. Similarly, crowdfunding requires content creators to manage their investors. This can be time-consuming and burdensome to finance as the number of investors in the crowd increases. Crowdfunding attracts crowds: interested investors and observers who follow the progress, or lack of progress, of a project. Sometimes it proves easier to raise money for a project than to make a successful project. Managing communication with a large number of potentially disappointed investors and supporters can be a substantial task, and potentially diverting.

Some of the most popular fundraising is for commercial companies that use processes to reach customers and at the same time market their products and services. It benefits companies like micro breweries and specialty restaurants - which essentially creates a "club" of people who are customers and investors alike. In the US in 2015, new regulations from the SEC to govern equity crowdfunding would mean that larger businesses with more than 500 investors and more than $ 25 million in assets should file a report like a public company. The Wall Street Journal commented "It's all the pain of an IPO without the benefit of an IPO." Both of these trends probably mean crowdfunding is best suited for small companies facing consumers rather than new companies.

Benefits for investors

There are several ways in which a well-organized crowdfunding platform can provide an attractive return for investors:

Crowdfunding Reduces Costs - The platform reduces search and transaction costs, which enables higher participation in the market. Many individual investors will have a difficult time investing in early-stage companies because of the difficulties of identifying companies directly and the high costs of joining the Angels Group or doing so through a professional venture company.
Early Current Investment Is Not Efficient - Venture capital firms often ignore the consumer sector and focus primarily on high-tech companies. Crowdfunding opens some of these neglected markets to individual investors. Crowdfunding makes no sense in every industry, but for some, like retail and consumer, that is it.
New Investor Value - Another reason why crowdfunding attracts investors is adding value to the company. They act as brand supporters and can even be used as focus groups. Crowdfunding allows individual investors to become a valuable part of the company they invest.

Risk for investor

On the crowdfunding platform, the problem of information asymmetry is compounded by the reduced ability of investors to conduct due diligence. Initial investment is usually localized, as the cost of performing due diligence before making investment decisions and monitoring costs after investment both increases with distance. However, this trend is not observed on the crowdfunding platform - this platform is not geographically limited and brings investors closer and further. On a non-equity or prize-based platform, investors try to reduce this risk by using the amount of capital raised as a signal of performance or quality. On an equity-based platform, crowdfunding syndicates reduce information asymmetries through multiple channels - through better portfolio diversification and due diligence as in the case of offline initial investment, but also by enabling mainstream investors with more information and networks it is better to lead the support crowd to make investment decisions.

Crowdfunding Tips and Tricks for Creators and Backers Alike | Make:

src: i1.wp.com

References

The Opportunities and Challenges of Crowdfunding in China

src: daxueconsulting.com

Crowdfunding

Sabtu, 30 Juni 2018

Crowdfunding

Video Crowdfunding

Histori

Maps Crowdfunding