Think you have the next big
idea but lack the resources to make
it happen? Crowdfunding sites might
be your best shot. Sites such as Kickstarter,
Indiegogo, RocketHub, and
Crowdrise have led the growth of crowdfunding
from $530 million in 2009 to almost
$2.7 billion in 2012, and will reach $5 billion
and beyond by the start of 2014. The Internet
is the ideal medium for crowdfunding because it
allows individuals and organizations in need of
funds and investors to reach one another from all
over the globe.
How do sites like Kickstarter and Indiegogo
work? The idea is simple—an inventor, artist, or
activist looking to raise money for a cause uses
the site to create a page for that project. People
can pledge to support the project, but the money
actually only changes hands once a project fully
reaches its goal. Otherwise, prospective donors
lose nothing out of pocket. The sites take a small
commission, usually about 5 percent, on completed
projects. Active campaigns are placed on
the front pages of each site.
The applications for crowdfunding are
diverse, from art installations, to movies, to political
action projects, to inventions. All you need
is an idea that investors believe is worth their
money. Crowdfunding is quickly becoming a mainstay
in nearly all of these fields. Kickstarter has
financed more installation art projects than the
National Endowment for the Arts in Washington,
and several of the biggest Kickstarter projects to
date have been movie projects that have struggled
to gain traction at Hollywood studios, like
the Veronica Mars movie project ($5.7 million)
and Zach Braff’s prospective film “Wish I Was