CROWDFUNDING: IT’S NO LONGER A BUZZWORD

From the beginning, I have maintained that crowdfunding will become an investment standard, the go-to system to raise funds and one of the best methods for sound return of investments.

Long before the JOBS Act came into play, however, crowdfunding (or its methodology) was already used in the US as a means to fund projects. One of the most prominent examples is the construction of the Statue of Liberty in 1884.

When resources for the completion of the pedestal for the historical landmark fell short, Joseph Pulitzer used his newspaper to call upon the public for donations to finish the plinth. More than a hundred thousand Americans joined in the campaign and chipped in small increments to raise some $100,000. Although crowdfunding was not the term used then, the practice resembles the same principles.

The term “Crowdfunding” is credited to Michael Sullivan when he used it in his blog fundavlog in 2006.

Merriam-Webster now defines it as “the practice of soliciting financial contributions from a large number of people especially from the online community.”

Oxford describes it as “the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.”

Clearly, both accounts show that crowdfunding requires two components to make it work: solicitation from the “crowd” to raise funds, and using the web as the community. These premises make crowdfunding an exciting scheme as everyday citizens can now invest using social media as the “trading floor.”

But as it sweeps almost every industry, its remarkable progress also demands further definition, if only to be more apt in all perspective. Crowdfunding is no longer merely online solicitation from the crowd, it goes beyond that.

I describe it now as “the practice of raising funds from two or more people over the internet towards a common Service, Project, Product, Investment, Cause, and Experience or SPPICE.”

The significant improvement in its definition is the involvement of the crowd to achieve overall — not just monetary — success. It’s not just about putting one’s money in a project. Rather, it is crowd collaboration to make sure the project succeeds.

We see how films, theatre, arts, and those in the entertainment industry now rely on crowdfunding to pursue their objectives. The industry gains a lot of support from the crowd, and it’s a very viable market.

Real estate projects likewise succeed through crowdfunding. The key ingredient to the success is the involvement of the crowd, beyond the investment they put in. Fundrise, for instance, became a leading real estate crowdfunding platform because it makes use of community participation. And with $31 million poured in from investors to the platform itself, we can say crowdfunding is now being embraced by the big boys.

The emphasis on crowd participation also greatly benefits charitable causes. This realm enjoys a huge support base primarily because of social involvement. Crowdfunding takes non-profit causes notches higher due to interaction amongst collaborators and donors. The power of social media furthers cause-oriented activities because everyone is given the space.

Even companies resort to the crowd in launching new products in the market. There’s a higher probability that a crowdfunded product will achieve success since the investing crowd will certainly back it up. That’s why it’s a clever concept.

Crowdfunding tremendously changed the investment landscape. By all indications, crowdfunding will further strengthen it. From a mere curiosity-inducing idea, the phenomenon now reigns in praxis and has transformed the industries into huge communities of success-driven investments.

Becoming embraced by so many is an astonishing feat for crowdfunding. And, as it’s now in the dictionary, ‘crowdfunding’ is no longer just a buzzword — it is being used to great effect in the real world.

http://www.crowdsourcing.org/editorial/crowdfunding-its-no-longer-a-buzzword/32268

 

David Drake is an early-stage equity expert and the founder and chairman of LDJ Capital, a New York City private equity advisory firm, andThe Soho Loft – The Voice of Capital Formation – a global financial media company with divisions in Corporate Communications, Publishing and Expos & Events. You can reach him directly at David@LDJCapital.com.

HEADLINE NEWS

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news [...]

NPRAfter Outcry, Crowdfunding Site Patreon Backs Off Plan To Raise ...NPRThe popular crowdfunding service Patreon has backed off plans to change its payment structure, after widespread, vocal and passionate opposition from creators and their fans. Last week, the site announced it woul [...]

TechCrunchHow hate speech crowdfunding outfit Hatreon crept back online ...TechCrunchIf you want to make a living creating white supremacist content, you're probably not going to do it via sites like Kickstarter and Patreon, which prohibit hate speech. Fortunately there's Ha [...]

EntrepreneurWhy Some Small Business Owners Are Turning to Crowdfunding to Save Their CompanyEntrepreneurMany owners of beloved local businesses, especially in pricier cities, have been forced to swallow their pride and appeal to their customers in times of crisis -- a process streamli [...]

CoinDeskKickstarter ICO? Don't Count On It Says Crowdfunding Leader ...CoinDeskThe company most widely associated with crowdfunding, Brooklyn-based Kickstarter, has no plans to get into the initial coin offering (ICO) business. Coming in response to the news yesterday that compet [...]

ForbesCrowdfunding Do's And Dont's From iFundWomen's Karen CahnForbesDuring our conversation, she was transparent in sharing that her first software company, VProud, failed because she “did everything backwards” and spent too much time trying to perfect the product. “Pe [...]

CryptoCoinsNewsCrowdfunding Giant Indiegogo Looks to Make ICOs MainstreamCryptoCoinsNewsCrowdfunding platform Indiegogo has a plan to help initial coin offerings (ICOs) break into the mainstream, even as the U.S. Securities and Exchange Commission (SEC) is ramping up its oversight of [...]

BBC NewsWu Yongning: Who is to blame for a daredevil's death? - BBC NewsBBC NewsLast month, Wu Yongning went out to do what he loved best - scale a skyscraper without safety equipment and film himself dangling off its roof by his fingertips. What happened next almost seems inevit [...]

TechCrunchFormer Gawker employees are crowdfunding an effort to buy Gawker.comTechCrunchWhile Univision acquired most of Gawker Media's sites last year (and renamed them as the Gizmodo Media Group), the deal didn't include Gawker itself. In fact, BuzzFeed reported last month [...]

NPRCrowdfunding For French CastlesNPRYou too can own a French chateau, in part, anyway. Romain Delaume, CEO of Dartagnans, tells NPR's Scott Simon about a crowdfunding effort underway to preserve La Mothe-Chandeniers. SCOTT SIMON, HOST: What if I told you that for about $60, you [...]

CFB Finance

Marketwired

  • Crowdfunding
  • Crowdfund
  • Peer to Peer Lending
  • FinTech
  • Reg A+
  • Reg CF
  • Crowdfunding USA

Press Release

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |