Crowdfunding Kicks Off to a Good Start

Crowdfunding is the latest trend sweeping the internet, with some sites boasting as much as a billion dollars raised to fund projects, so what is it?

Creators use crowdfunding sites such as Kickstarter and Indiegogo, to raise enough money to make their dream projects a reality. They set a goal for an amount of money needed, as well as a time limit in which said money must be raised. Funders pledge money and often receive perks for donating a certain amount of money. Than the creator uses donated money, minus a fee, to make their idea a reality. The difference between the specific sites one can host content on is mainly the fees of using the site. Kickstarter.com takes 5% of the money donated, but only charges if project reaches its funding goal, while Indiegogo charges a 9% fee, but lowers it to 4% if the funding goal is reached (3% for verified nonprofit organizations). Both websites also charge fees for third-party services. Other websites also have similar fees.

What makes crowdfunding great is the wide variety of ways it can be used. Websites such as crowdrise.com and kiva.org use crowdfunding to help the world. Crowdrise uses the new medium to raise money for specific charities, while Kiva uses the power of crowds to grant interest-free loans to entrepreneurs in developing nations. Some other sites focus on specific types of content, such as teespring.com, which funds and sells t-shirt designs. Content that is funded does not necessarily need to be physical either. Subbable.com uses crowdfunding to support creators of online content, mainly web series or vlogs, while appbackr.com funds app developers. Other creative uses of crowdfunding include quirky.com, which funds ideas and then develops successful ones, and tilt.com, which is similar to Indiegogo only more focused on smaller sized campaigns.

There have been some mixed feelings over the uses of crowdfunding, with the infamous potato salad Kickstarter raising $55 492 to simply make a potato salad, and the controversial support Darren Wilson campaign on gofundme.com inspiring a fair bit of rage. However, the positive campaigns far outweigh the negatives, with the brilliant new innovations being funded including solar roadways, a Nikola Tesla museum, personal robots, affordable 3D scanners and printers, a revamp of the popular series Reading Rainbow, wireless headphones, and virtual reality device Oculus Rift.

Good or bad, crowdfunding is definitely changing the relationship between creators and the general public. It’s allowing us to directly influence small businesses and entrepreneurs, and to support the products we want made. It is also allowing us to access products we would otherwise never know existed, and it allows creators to access an otherwise unthinkable amount of people. Who knows where it could go from here?