Perhaps you’re looking for something that will give you a better return than a savings account. Maybe you fancy emulating the likes of Peter Jones and Duncan Bannatyne by becoming “an armchair Dragon” and investing in a fledgling business that you think has the potential to grow. Or perhaps you would like to do something good for your community, such as chipping in a few pounds towards solar panels for your children’s primary school, or to support a vital local amenity.
Alternatively, you might jump at the opportunity to help finance your favourite artist’s latest project in return for a name-check on their next CD, or tickets to their film premiere.
If any of these sounds appealing, check out one of the rapidly growing number of crowdfunding websites that are becoming an increasingly vital fundraising tool. These are where lots of people invest or donate small sums to help a project, business, charity or social enterprise get off the ground or grow. It may seem like a very “now” phenomenon, but it has been around for years – though the internet has given it a huge boost. In 2008, Barack Obama raised $137m (£88m) during his campaign for the US presidency by using crowdfunding, and nowadays it is perhaps best-known as a way for musicians, film directors and other “creatives” to get funding.
Last month Reuters reported crowdfunding had helped companies and individuals worldwide raise $2.7bn (£1.7bn) from the public in 2012 – an 81% increase on the previous year. This year the total is predicted to hit $5.1bn (£3.3bn).
Here we look at what’s on offer in the UK and how you can get involved.
Films, music, games, art etc
For some people, crowdfunding has become synonymous with US website Kickstarter, which claims that, since its 2009 launch, more than 3.9 million people have pledged enough money to fund more than 40,000 creative projects.
In October 2012 it opened to projects from UK-based individuals, and this week featured scores of ventures across the country, including a new musical based on Bret Easton Ellis’s 1991 novel American Psycho that will open at London’s Almeida Theatre in December and is looking to raise $150,000 (around £97,000); the Birmingham Architecture Festival on 24-27 May (whose target is just £1,250); and several Edinburgh Fringe shows.
Kickstarter can’t be used to offer financial returns or shares – instead, project creators offer “rewards” to thank backers for their support.
In the case of the American Psycho musical, to be directed by Rupert Goold, it had, by Thursday, raised $30,000. A pledge of $5 gets you a download of one of the show’s songs while, for $300, you will receive various goodies including a copy of American Psycho signed by Ellis.
On Kickstarter, a project has to reach its goal before the deadline or no money changes hands – less than 50% make it. The minimum pledge is usually £1 or $1. Be warned, the site “does not investigate a creator’s ability to complete their project”.
There have been articles claiming some Kickstarter-funded ventures missed their stated delivery dates.