Crowdfunding. There’s a word we hear quite a lot these days, and a lot of people aren’t too familiar with the background to it. Crowdfunding is the process of usually raising large amounts of money by way of many small contributions from people. This is usually done over the internet, and normally the people donating the money are members of the public – though sometimes businesses and entrepreneurs will get involved.
You might be familiar with some crowdfunding ideas, not to mention companies like Kickstarter and Indiegogo. As the years have progressed, and the internet has grown, we have found that crowdfunding has become much more commonplace. But, there was a time before it existed, and we’re going to take a look back at the history and evolution of crowdfunding as an idea, and a process.
Crowdfunding wasn’t a thing until around the mid to late 1990s. In fact, the accepted year given for the start of the process that would become modern crowdfunding is believed to be 1997. In this year, a British rock band named Marillion used online crowdfunding to try to finance their comeback tour of the US. This was the first modern recorded instance of successful crowdfunding – though technically it has been around since the late 1700s, in the form of things like war bonds.
The evolution of crowdfunding has changed a lot since the successful attempt made by Marillion to secure funding. This inspired the 2000 creation of crowdfunding platform ArtistShare, followed by more and more platforms with every passing year. Though it might have begun in the music scene, crowdfunding has also spilled into other areas of the entertainment world, such as movies and gaming. It has also become the go-to way for entrepreneurs to get online, get their ideas out there, and secure financial backing if they should need it.
There are generally different types of crowdfunding for the people who are interested in getting involved with it. These are generally things that companies started to use to help entice backers into donating and getting involved. There are different types of crowdfunding – the main two are considered to be rewards crowdfunding and equity crowdfunding. These are pretty obvious, but, there are also other forms of crowdfunding, such as debt-based, software value token, litigation, and charity-based. Interested backers should make sure they research what type of project they are backing thoroughly before stumping up cash.
In 2017, crowdfunding opportunities are more prevalent than ever, especially as so many more people are starting their own businesses, or trying to get projects off the ground. Companies like Indiegogo, Peerbackers, and Fundable have a much higher reach today than they once did, and this has made it easier for people to get their ideas out there. If you are looking to get involved in backing a new business or finding funding for your new startup, this is perfect for you.
Crowdfunding has revolutionized the world of business and given more people the chance to see their ideas come to fruition. It’s important to make sure you understand how crowdfunding works before you get involved, as the process has not been without its share of controversy.