Crowdfunding: What’s It All About?

Here at WellConnectedMom.com, everyday we have the privilege of catching glimpses of up-and-coming technology and gadgets that hope to make it big in the marketplace.  Technology is the hotbed of innovation and can help solve many needs…if its production and marketing are executed correctly.  But there are so many inventors and companies with ideas and not enough investor money to make them all happen.

This is where the brainchild of crowdfunding comes into play.  Inventors, small companies…and even large internationally known companies, are marketing their innovations through websites like IndieGogo and KickStarter.  On these sites, people and companies tell the story of their innovation and how their new product, artistic endeavor, or charity will change lives…or make them easier…or more fun.  Potential crowdfunders like you and me read their story and then we are given the opportunity to donate to help them put their creation into production.

Most inventors/companies have incentives to inspire your donation.  Donate $5 and you may be put on their priority insider information email list.  Donate $200 and you may be one of the first to receive the product once its manufactured.  Donors of $5k and more might be given the opportunity to have dinner with the inventors.

The crowdfunding industry is big.  It was estimated that the crowdfunding market successfully brought in more than $5 million in funds in 2013.  According to a 2013 study initiated by the World Bank, by 2025, crowdfunding is expected to bring in over $90 billion dollars.  If you aren’t participating in crowdfunding now, chances are you will sometime in the future.

Is Crowdfuding Just for Technology?

No.  Although there are a lot of gadgets with unique qualities being crowdfunded, you can also find independent movies, musicians seeking funding for a new album, authors seeking funds for books, clothing and cosmetics, and more.  In fact, crowdfunding is now being utilized for individuals seeking personal funds to cover medical costs, replacement for personal loss (as in a fire, car accident, etc.), and donations for schooling.

Crowdfunding thrives for charities as well.  Some websites even help individuals crowdfund to their friends to raise money for charities dear to their hearts.

Interested in finding out what’s available today for crowdfunding?  Here is a list of some of the most popular and successful crowdfunding websites:

One of the very first platforms for crowdfunding.  Since it’s beginning, Kickstarter has pledged $1.7 billion to projects, encompassing over 8.4 million people backing these projects.  Kickstarter encourages projects like documentaries, new creative products, art installation, albums, etc.

Indiegogo has less stringent rules about who can start up a campaign.  Started in 2008, it is the world’s largest global fundraising site geared towards individuals, businesses, and non-profits.  Indiegogo has launched over 275, 000 campaigns, about 30,000 have started outside of the US.  Indiegogo has 15 million visitors visit its sites each month.

RocketHub has a relationship with TV’s A&E where A&E will select certain projects to bring them to light on their new show, Project Startup as well as in their magazine.  In addition, A&E has committed a significant amount of funds to pour into certain RocketHub participants’ projects.

Different than the others, Crowdfunder focuses on raising investments for businesses to bring in new capital for early stage finance.  Rather than donors, money funders become investors or shareholders in a company.

Crowdrise is dedicated to helping individuals and charities raise money online for personal causes, fundraisers, and event fundraising.

Crowdfunding is here to stay, with new innovative models emerging all the time, like the new iFunding.co site that links real estate developers and investors.  If you haven’t checked out some of these crowdfunding sites, take a look at some of the projects and products.  Many are  fascinating and have videos from the founders to walk you through their thought process when developing the product and how they believe it will make an impact.

Find out more about Zach’s dream on Crowdrise of donating to the Hugs for Brady Foundation and how it relates to his teacher’s class assignment “a dollar and a dream.”  Love wine and basketball?  Famous basketball player, Yao Ming is nearly done raising $3 million in capital for his Yao Family Wines which sells premium wines to the US and China.  Want to help fund the first university-led mission to the moon?  Donate to the Lunar Lion project on RocketHub and help Pennsylvania State students.  And from Kickstarter, meet Freiya, the watering can that reminds you via your smartphone to water your plants.

Do you always have one lingering problem that you wish a product could solve?  Perhaps it’s on one of these crowdfunding sites now…or better yet, perhaps the time is now for you to create the product!