The UpTake: Big corporations are waking up to the fact that crowdfunding isn’t just an effective tool for startups and small projects. But they’re not using crowdfunding to raise money—they’re doing it to help their communities, their employees and their public image.
Hear the word “crowdfunding” and chances are you automatically think of a startup trying to raise money for a product launch or an artist trying to scrape up enough dough to finish a movie or an album. You probably don’t think of Fortune 500 companies and their millions, if not billions, in revenues.
But as Alon Goren, the co-founder and CEO of Invested.in, explains, big companies are becoming more and more intrigued with crowdfunding, but for different reasons than entrepreneurs and creative types. Goren, whose company builds crowdfunding platforms for third parties, stopped by the Upstart Business Journal this morning to talk about this twist on crowdfunding.
“For them, it’s not about the money,” Goren told me soon after he arrived in New York, where he’s taking part in the two-day Massolution conference on crowd powered business. “It’s a vehicle to get into innovation or experimentation or to seek validation.”
Invested.in, based in Santa Monica, California, works with a few big clients: Coca-Cola Mexico, which has set up a crowdfunding campaign where entrepreneurs and non-profits can pitch their projects and if they get enough traction from the community, Coca-Cola will pay for 50 percent of the project costs; and ATB Financial, a Canadian institution that is providing a platform to boost small businesses in Alberta and then giving promo codes to people where they can go online and give money on ATB’s behalf to the projects they want to support.
Goren laid out four ways big corporations can make crowdfunding work for them:
1. Helps with marketing—Traditional forms of advertising are losing their appeal, so businesses are looking for different ways of getting their message out and a crowdfunding campaign can be very effective here. “If Coca-Cola tried, they probably couldn’t buy that kind of traffic,” Goren said
J Jennings Moss
Upstart Business Journal Editor