In the past, raising money for a capital venture, promising idea, or personal passion required knowing a guy. Or at least knowing a guy who knew a guy. Luckily, over the last decade plus, that has all changed thanks to crowdfunding.
A term used to describe the online networking and pooling of funds for a stated project or mission, crowdfunding can be readily observed on kickstarter.com, indiegogo.com, or crowdfunder.com amongst many other sites.
Maybe you’ve already contributed to your favorite band who’s looking to fund their next label-less album, the local brewery trying to build a taproom and offering beer for life for a mere $1,000, a company looking for initial investors, or one of the many fantastic philanthropic options readily available.
Crowdfunding is getting so big, that many now are calling it the next social media-esque craze. A more accurate proclamation is that it could very well be the next evolution of social media as we know it. Many are just now getting comfortable with social media as a means of marketing, advertising, and customer relationship building, but it’s best to stay ahead of the curve! Let’s take a look at the next level of marketing: crowdfunding.
On the Rise
According to EquityNet, Crowdfunding is projected to raise more than $20 billion in 2015, after successfully raising $10 billion, $5.1 billion, and $2.6 billion in previous years. And just wait until Title III crowdfunding rules are finalized by the Securities and Exchange Commission, as a part of the JOBS Act.
Then, for the first time, non-accredited investors will be allowed to invest in private companies. We are on the verge of crowdfunding being a viable option for anyone over 18 years old to invest in private companies for actual equity, rather than just allowing them to support a familiar or worthy cause with relatively little to show for it.
Popular with Millennials
Having grown up with technology their entire lives, very responsive to non-corporate, grassroots efforts, and more willing than any other generation to donate to nonprofit organizations makes Millennials and crowdfunding a perfect match. Where social media introduced Millennials to companies, organizations, and products, and nurtured their symbiotic relationship, crowdfunding allows them to proactively support them like never before.
Where Voice Meets Choice
Crowdfunding is an opportunity for people to reach out to a much broader network than they may personally have, in search of support. Some campaigns revolve around an illness that one has and the expensive or otherwise insurmountable price tag associated with treatment.
Others are crafted by entrepreneurs looking for the investment required to launch their dream company or product. In all cases, crowdfunding is giving a voice (or at least amplifying their existing voice) like never before. It also gives the average person a choice that they might not have otherwise had – to support a cause they believe in.
A Social Media "Next Step"
“On the rise”, “popular with Millennials”, and “where voice meets choice”…hmm… sound a little bit like social media? Social media altered relationships like nothing had before. Suddenly, millions of people had instant access into the lives of family, friends, and friends of friends. With crowdfunding, that relationship can be taken to the next level, as financial exchange enables a growth opportunities.
Companies and organizations can take advantage of crowdfunding as well, by supporting their customers (by advocating their campaigns) and creating positive public relation opportunities at the same time. Clients and fans can contribute to these relationships by directly supporting a wide variety of efforts – from established organizations looking to bring a new product to market, to individuals who are pitching new organizations! These are very exciting times.
Now that you know what crowdfunding is, look into how your organization can best use it and its marketing potential. Consider promoting some of your client’s projects, starting your own to gain support and increase exposure, or showing off your philanthropic side by contributing to and then promoting a worthy cause outside of your traditional circle of influence.