Remember the age old practice of going door-to-door around the neighbourhood, asking for money or selling chocolates so the local scout troop could get some new equipment? Combine this age-old practice with the majesty, reach and power of the Internet and social media and you’ve got what’s known as ‘crowd funding’. Crowd funding via the web has been getting some great press recently with the success of projects like Minecraft, but many people are still in the dark about what it is and how it works.
So how does it work?
In the past, people with brilliant ideas for products or services have sought out investors to fork out the money to get the idea off the ground or volunteers willing to invest a large amount of time or resources. For this reason many amazing ideas and projects have the potential to fail before they ever see the light of day. Even those who do succeed in securing capital often end up losing creative control or leadership of their project to the investor as part of the deal.
This is where crowd funding comes in.
Rather than asking one person for $10,000 to get your band’s new album started, you ask 500 people for just $20 each. You might also offer rewards to people who donate money, like a signed copy of the album or free tickets to your next show. By doing this, your project stays in your own hands and has a fighting chance of becoming a success.
Getting your idea off the ground
Crowd funding sites Pozible and Kickstarter are a good place to start. These act as “all or nothing” platforms where someone can set a goal and time frame for their project. If their goal is met, the money is handed over to them and if not, the donors can keep their money (or pledge it to another project).
One of the recent success stories on such a platform is Rich Burlew’s drive to get some of his old The Order of the Stick books republished. While he originally requested around $57,750 in funding, he actually raised $1,254,120 by the end of the thirty-day period. That’s 2172 per cent of the original goal, with the extra money promised to go into bringing more of his old works back into circulation.
How to reach the people
If you think crowd funding is the way to get your new site off the ground, look at how other projects have reached success and always be sure to include the following on your to-do list:
The downfalls of crowd funding
As a creator, be aware that you might not always succeed as you’re essentially asking people to give you money without many ways to ensure you will produce a product in the end. Similarly, if you’re looking to donate, keep in mind that people could use such a service to scam people into providing money and not showing up with the goods. Other groups might also try building the finished product, hit a snag and walk away.
That said, crowd funding can be a life saver for people trying to turn an idea into reality. The power of the people can be really great resource, especially when you don’t have access to many other resources. If you’d like to learn more about crowd funding, check out this list of nine crowd funding websites to help you change the world.