By Ilya Pozin, Contributor,One of the hardest aspects of starting a new venture is obtaining financial backing. Instead of turning to an investor or applying for a loan, many entrepreneurs are taking the alternative route of crowdfunding.Crowdfunding sites can be an appealing option for new and aspiring business owners, but such sites are not free of limitations or drawbacks.
Some argue that there is a disconnect between the promises and realities ofcrowdfunding. For example, as a result of the CROWDFUND Act, a section of the JOBS Act, various restrictions are placed, one of which caps the amount that can be raised in a 12- month period at $1 million. The law also limits the amount a person can invest in crowdfunding ventures to 10% of their annual income. Many also call into question the ability of the crowd to make valuable investment decisions which are sustainable and can pave the way for viable businesses.
Nonetheless, it’s estimated that in 2012, $2.7 billion was crowdfunded for more than a million projects worldwide. This year, crowdfunded revenue is expected to exceed $5 billion. While the crowdfunding industry does seem to be booming, the true test of crowdfunding sites lies in how they will hold up in the long term. Below are 5 emerging crowdfunding sites seeking to make a long-term, global impact:
1) Lucky Ant
Lucky Ant is a crowdfunding platform which leverages the power ofcommunity to fund mom-and-pop businesses. Each week a new local business’ project is posted, giving members of the community the chance to contribute and help those businesses realize their dreams. All contributions are rewarded by the businesses raising funds with perks which could include anything from discounts on products or services to having a meal named after the contributor. Lucky Ant relies on crowdfunding to improve communities for everyone.
Seederella is a search engine exclusively for discovering new crowdfundingprojects. The search engine collects the best projects from across the Web, including equity, rewards, lending and donation based projects, making it easier to find, browse and support all kinds of crowdfunding ventures. Founded in 2012, Seederella helps potential investors cut through the noise and find relevant projects with the help of a host of features. These include filters for sorting projects by monetary goal, time to go and status.
AppStori is a crowdfunding platform which connects mobile app consumers and app developers, facilitating the creation of apps. The AppStori platform transforms app development into an interactive and collaborative process where developers can harness the community to beta test their app, raise funds or even advertise and build a user base. With AppStori, mobile app enthusiasts now have an active role in shaping the development of apps before they hit the app store.
Sportfunder connects sports fans, enthusiasts and professionals forcrowdfunding focused on raising funds for sport-related projects. The platforms helps sportsmen and women reach their potential by getting fans to contribute to sporting dreams. As a platform which only launched in 2012, Sportfunder has already managed to get some big projects off the ground. These include crowdfunding just over$17,000 for a professional New Zealander surfer, Ricardao Christie, whose dream was to take part in the 2013 World Qualifying Series.
Givted takes the crowdfunding approach to gift-giving by letting loved ones work together to get mutual friends the pricier, more high-end gifts they really want. The service works by letting users compile lists of the gifts they would like. Friends are then able to browse and select a gift they want to purchase from the want-list. It’s easy to invite others to chip in for the selected gift and contributions can be made securely online. Givted offers a novel take oncrowdfunding which takes the hassle out of getting loved ones the perfect gift.
Whether these and other crowdfunding sites will win the hearts and minds of entrepreneurs in the long run remains to be seen. But as our innovation economy moves forward, with more entrepreneurs and new businesses than ever before, our eyes should be kept on the crowdfunding space.
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