Blog Layout
What is Crowdfunding and how can it help my business?
Jun 17, 2016
Mat Durham
Musicians, filmmakers, and artists have successfully raised funds and fostered awareness through crowdfunding.
You’ve probably heard the buzz about the latest in funding innovations, but you may not yet know how crowdfunding could help you as a small business or enterprise. Being turned down for a loan application by your High Street bank may no longer spell the end of the line for your latest business dream, since crowdfunding uses the donations or investments of a number of people who commit a sum of money to projects and companies they want to support. This is a very new and fast-growing market and it’s totally transforming how businesses raise capital.
Deloitte predicted that crowdfunding would raise $3 billion globally in 2013, doubling 2012’s grand total. And this is just the beginning, folks — they also expect crowdfunding to continue to snowball at 100% annually into the foreseeable future. So here are the three main sorts of crowdfunding enterprises entered into these days. Could one be for you?
Reward-Based
Crowdfunding is best known for reward-based initiatives, the sorts you see on Kickstarter and Indiegogo where patrons get something back from their donation – normally a token of appreciation. This may be tickets to the event they’re funding, or getting their name printed in the front of the book they’ve helped publish. The smart watch, Pebble, received over $2.6 million after 72 hours on Kickstarter.
Donation-Based
Small loans are awarded to local entrepreneurs to help fund short-term, often community-based projects. This is rather like a combination of finance with online crowdfunding, and contrary to popular belief, it’s nothing new. Sites like Kiva.org have funded SMEs in emerging markets for over a decade.
Equity-Based
This one offers huge potential to change the face of investment in the future. AngelList, CircleUp and OurCrowd are rather like online venture capitalist agencies that introduce potential investors to startup opportunities with very low minimum investment fees. Equity crowdfunding is expected become the biggest crowdfunding mode over time with a predicted growth rate of 114% in the near future.
So is crowdfunding for you and your business? Or could it be the answer for a friend or acquaintance with a big idea and a small overdraft facility?
"The team are extremely creative and dynamic. They took the time to understand our target market. Our new website is professional and I'm very pleased with the overall end result. I have recommended them and will gladly do so again."
Jim Panton / Chief Executive / Panton McLeod
"Green Nineteen have breathed new life in to our website. It now looks fresh and professional, is easy to update with new copy and news. Most importantly, it is delivering new business opportunities and providing us with an excellent return on investment."
Rob Jenkins / Director / International Trade Solutions
"Green Nineteen have been integral in placing our company on the web. Their interpretation of our image and subsequent building and customising of our website has been first class. They are committed to ensuring our web presence is reviewed, updated and maintained."
Karen Cram / Director / Thru The Mill
Find out how we'd approach your
project.
