by Stan Ho Do you have a dream, a dream you are longing for but which has been gradually worn away by reality? Maybe you want to release an album or run your own restaurant but you can never get enough money to do it. That’s where crowdfunding comes in. Crowdfunding is a method of raising capital through the collective effort of friends, family, and individual investors. It is usually consists of a large pool of individuals contacted via social networking or crowdfunding platforms. Crowdfunding is essentially the opposite of mainstream approaches to business finance. Traditionally, if you want to raise capital to start a business or launch a new product, you need to create a business plan, do market research, make prototypes, and then shop your idea around to a limited pool or wealthy individuals or institutions. These funding sources include banks, angel investors, and venture capital firms, and they really limit your options to a few key players. You may think of it as tossing coins in a wishing well. The chances are slim. On the other hand, crowdfunding is like owning a wishing well. People around the world keep tossing you money as long as they find your wishing well interesting. With crowdfunding, there are many more interested parties who can help your business grow. They can invest money in exchange for equity or contribute a small amount in exchang
The first online crowdfunded project is thought to have occurred in 1997. The rock band Marillion were unable to afford to tour after the release of their seventh album, so American fans used the then fledgling internet to raise $60,000 so they could play in the US. Although the band wasn’t involved in the first round of fundraising, they have since used the same techniques to successfully fund the production of their next three albums. Other creative projects soon followed suit, such as films and journalism, and the first crowdfunding website appeared in 2001. In 2016, there are over 500 crowdfunding platforms online, and the total amount of money raised has reached $34 billion. There are many popular crowdfunding platforms that serve different purposes. For example, Indiego is famous for launching films, while kickstarter focuses on design, gaming, and technology. Each platform charges differently, normally a fee of 5%. Some gave backer rewards if the project is successfully funded. Others may provide project starters a stand-alone website. Since the crowdfunding industry has grown rapidly, more and more individuals or groups may have become a member of the crowdfunding community. However, not everyone knows how to make commercial films, write ad copy, and create websites to promote their ideas. Thus, crowdfunding consultants have emerged. A Crowdfunding consultant provides services such as pre-prototyping to estimating whether the idea is great enough to collect sufficient money. One famous crowdfunding consultant in Taiwan is Backfounder. Backfounder is quite popular in the crowdfunding community because it not only specializes in promoting products but also has positively impacted Taiwan’s society. When the sunflower movement occurred in 2014, they helped people gather money to buy a full-page advertisement in The New York Times to raise international attention. They have also assisted a science group at National Chiao Tung University to launch a Taiwan-made rocket. In addition, they are helping small farms to sell their milk without the exploitation of wholesalers. Overall, crowdfunding platforms and crowdfunding consultants are making significant influences in society. In this rapidly changing world, manufacturers and financial groups are not the only ones to decide how our world will be changed. We can always dream big with crowdfunding and brilliant ideas can be realized no matter how much (or little) money we have. a
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May 2024
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