Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people. It is a form of alternative finance, which has emerged outside of the traditional financial system.
The crowdfunding model is based on three types of actors: the project initiator who proposes the idea and/or project to be funded; individuals or groups who support the idea; and a moderating organization (the “platform”) that brings the parties together to launch the idea
Here are some interesting facts about Crowdfunding
The first crowdfunding project was in 1997, when fans underwrote an entire U.S. tour for the British rock group Marillion, raising US$60,000 in donations by means of a fan-based Internet campaign.
According to keyboardist Mark Kelly, we emailed the 6000 fans on our database to ask, “Would you buy the album in advance?” most replied “yes.” We took over 12,000 pre-orders and went on to use the money to fund the writing and recording of the album. That was the crowdfunding model that has been so successfully imitated by many others including the most successful, KickStarter.”
The highest crowdfunding project to date (25 February 2016) is for the Star Citizen video game, an online space trading and combat video game being developed by Chris Roberts and Cloud Imperium Games. This project has raised over $109,077,583 backed by 1,288,702 “star citizens”.
The campaign started on the 1st of September 2012 and is still ongoing.
The fastest crowdfunding project to surpass $1million USD goes to the Pebble Time smartwatch on the Kickstarter platform. This happened on the 23rd of February 23, 2015, and it did this within 49 minutes.
Ultimately 78,471 backers pledged $20,338,986 to help bring this project to life.
One of the most interesting crowdfunding campaigns is the Potato Salad campaign which involved a gentleman, Zack Danger Brown who wanted to try his hand at making a potato salad. However having never made one before he was nervous about wasting money on ingredients. This happened on the 3rd of July 2014.
He then went onto the Kickstarter site hoping to raise the $10 (£6.57) required to make a potato salad, and ended up with $55,492 backed by 6,911 backers.
Zack used all the excess money to send T-shirts and recipe books to everyone who pledged money.
Another interesting crowdfunding campaign is the purchase of a beach. Nearly 40,000 people donated almost NZ$2.3m (£1m, $1.5m) to buy the Awaroa beach in the Abel Tasman National Park, on the north coast of South Island, which went on sale last year. The project was launched after a group of friends vowed to secure the beach for public use.
The bid to buy the seven-hectare inlet from a private owner, businessman Michael Spackman, and hand it over to the public began in January 2016. The inlet was listed before Christmas and includes 800 metres of beach.
To know more about crowdfunding sites, check out our earlier article on “Top 5 crowdsourcing websites to raise funds”
