The rise of the Internet has brought in a democracy to design in many cases. Stories of crowdsourced flavours of chips, or programmes on television are the norm now, not the exception. One other area that has seen a lot of interest in recent times is crowd-funding – where people have been able to invest small amounts in ideas that might not get funding if they were to go the VC route.
There are more than a few examples of this online today, with one of the first, Kickstarter, having been around since April 2009. Kickstarter aims to fund small scale creative projects, and there are incentives to the funding – for example, a small donation might earn an autographed copy of the movie, while a $5,000 donor would be listed as an executive producer in the opening credits.
For social projects, there is Crowdrise, which uses crowdsourcing of funds to give everyday philanthropists a chance to contribute to social projects, and again, incentivises the activity by giving prizes to active members. Citizen Effect does a similar thing, with celebrities showing up on the pages and encouraging the rest of us to give as well.
The possibilities of such services are quite far reaching. The idea is to get funds to anyone, anywhere, and as the tagline on a similar site, invested.in, states: “Because banking types don’t get it”. If an idea is quirky and individual, then it’s quite safe to think that a lot of people will pledge support, even in small amounts, and Kickstarter is transferring $1 million every week and $35 million overall. The TikTok and LunaTik iPod watch kits set a site record, raising close to a million dollars on just one project.
Small entrepreneurs can offer deals to donors and using social networks can direct more people to their funding page, and build up a viral effect to quickly meet their goals. A similar service is invested.in, while Sellaband offers similar services for musicians.
At the same time, crowdfunding isn’t just for quirky projects or creative ideas. Serious investors should look to sites like GrowVC.com. While sites like Kiva match investors and entrepreneurs in the developing world, GrowVC is a social networking platform that allows investors and entrepreneurs to communicate with one another. There is a limit of $1,200 to each fund, but members can also carry out negotiations outside the website, which GrowVC facilitates without taking any cut from such transactions.
The company explains, “We’re here to fix the traditional opaque and mysterious start-up funding system. GrowVC offers the platform and tools, so the process from idea to launch can be managed and communicated in a more structured manner, while at the same time enabling the race to success to start much earlier.”
Additionally, GrowVC Founder Valto Loikannen said on a blog that, “the community fund acts as a kind of spotlight for successful companies. It acts as an ‘activator’ for bigger investments, similar to the ‘Like’ function in blogs”.
A similar service is Profounder, which allows people to submit pitches, invite friends, carry out their transactions online and also has a system in place for repayments, and also rewards for regular investors. A testimonial on ProFounder by Neil Pane of Chaka MarketBridge says: “ProFounder was the perfect solution for Chaka to help us to give our real supporters a chance to invest in the critical social and financial returns that Chaka is working so hard to generate.”
And not so serious too
Of course, when individual donations are kept low, things can get a little strange online. And so there’s a fund on Kickstarter to raise $50,000 to build a statue of RoboCop in Detroit. It all began with a joking tweet by Twitter user MT, who suggested that the city erect a statue of RoboCop, as a famous fictional character from Detroit. Things escalated when the Mayor wrote on his Twitter account that there were no plans to erect such a statue.
Soon, the tweet went viral, and a group was created on Facebook to support the newly-formed movement, and quickly a non-profit art group had created a page on Kickstarter, which gathered $20,000 in just four days, and reached $50,000 in less than a week.
Whether they will be able to go through with the art installation remains to be seen, but provided there are no legal restrictions against this sort of thing, Detroit might just be getting a RoboCop statue in the near future.
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