Crowdfunding: A Peek Into the Future
In a not so distant past, crowdfunding was not even a word. In fact, there are still more people out there who are on the internet quite often (mostly on social media) and yet do not even know what crowdfunding mean. Nevertheless, it’s such a big thing today, the go-to platform of people who wish to fund a relevant cause or finance the new business they want to start. Is ‘fund raising’ still a relevant term today?
Thanks to pioneer crowdfunding sites such as Kickstarter and Indiegogo, crowdfunding has been catapulted to the mainstream category of the business world. With so many people, organization, and companies choosing crowdfunding today, what could the near and distant future look like for the popular platform? To determine this, we have to understand the different trends today that are helping to influence what crowdfunding will be like tomorrow.
Domination of certain platforms
Ever since crowdfunding has started the numbers of different platforms or sites that offer crowdfunding has ballooned. From just over 300 in 2013, the following year alone has seen a three-fold increase. However, despite of the said numerous choices for crowdfunding platforms, there are still a small number that dominate overall, such as Kickstarter and Indiegogo. This happened even if there are already crowdfunding sites that offer niche specialization, like MedStartr for healthcare related campaigns and startups, AppStori and Apptamin for app development (although Kickstarter is still the preferred choice for startups), and Barnraiser and Agfunder for campaigns or startups that has something to do with food and agriculture. Experts have compared the current scenario to what is happening today on social media – there are a lot of sites available and yet there are just few that people flock to, which dominate the entire social media landscape, consisting of Facebook, Instagram, and Twitter. The said experts believe the future will basically be the same, with Kickstarter looking at a definite increase it its current 7,500 crowdfunding campaigns.
Big corporations are entering the scene
When crowdfunding started, the usual clients were independent and small startup companies, but now the corporate world has discovered the gem that is crowdfunding, and they want in. Or rather, they are already in, and the vision looks like there is a possibility they could dominate it. Some experts worry that the entrance of big shot companies can change the essence of why crowdfunding was started in the first place, which mainly is about ‘giving chances to others’. If you are wondering how these Fortune 100 companies can attract people to back them up when they already know they have the fund to do so by themselves, well it seems they have cooked up a certain approach. These big companies , such as Sony that started an E Ink crowdfunding campaign, use a smaller subsidiary company to represent them, therefore not letting people know it’s a big company that’s behind it after all.
Experts for hire
Let’s face it, some startups have innovative products that are useful and can really sell, but do they have the talent to market it well so that people will back up their campaigns or projects? The reality is that not many can handle or run crowdfunding campaigns as well as building great products, which is why one of the scenarios today is that startups are turning to campaign experts to manage their crowdfunding campaigns for them.
And believe it or not, there are companies that do specialize in the said job, such as Agency 2.0, which is a company, composed of a team that manages crowdfunding campaigns based on the Los Angeles area. Depending on the work the company needs to do for a certain project, their fees range from $3,000 to as much as $25,000. A high fee is worth it if they can make your campaign successful, like what Agency 2.0 did to ChargeTech’s campaign for the smallest mobile phone charger in the world. The agency helped ChargeTech increase their initial collection of $120,000 to $326,000. However, experts agree that no matter how great the agency you hire to manage your campaign, if you have a weak product, then the process will just be useless. So it still comes down to having an innovative product that investors will believe in and back up.
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