It’s official, crowdfunding is going mainstream
If something is popular or trending, it’s only a matter of time before it gains so much of a following that it starts to become mainstream, and such is the case with crowd funding. Whereas in years past, entrepreneurs would likely go to a bank or credit union for funding, today a larger number of the them are also considering crowd funding options. And although it was first seen as an edgy alternative (well, as edgy as finance can get), for project owners to take things into their own hands and appeal to the masses, corporate players are also looking to get into the mix.
For instance, last month, CNBC premiered Crowd Rules, a reality show in which entrepreneurs compete for audience votes in order to win $50,000, illustrating the huge inflection point that industry is now experiencing, which is a huge advancement from the more standard route of making a Kickstarter. The probability of project owners obtaining investments is still hugely subjective, and depends on how much they are able to persuade investors and peers to back them, but now TV networks and high profile business people are placing the industry in the spotlight. A&E has also partnered with crowd funding site Rocket Hub in order to showcase the unique stories of entrepreneurs who have received funding, and even Donald Trump has started a site open to anyone looking to raise money.
Why are more business people flocking to crowd funding?
Perhaps because we are now in a digital age that is flux with new technologies and innovations. We rarely do things in the same form as generations before, and now more than ever consumers have a need for instant gratification and the desire to control personal and business outcomes. “Everybody likes to have their hands on the green button,” says Kevin Berg Kartaszewicz-Grell, the director of research at massolution. Not only does it empower individuals to raise money, it’s also attractive to supporters who want to be a part of something larger than themselves.”
Although some could say entrepreneurs who turn to crowd funding instead of a financial lender might have issues with relinquishing control, it might just be that they are so passionate about their businesses that they feel no one else can present it to the public quite like they can. One of the beauties of crowd funding is that project owners can go beyond the numbers and estimations and showcase the unique selling points of their business that the investor community can connect to. Crowd funding portals allow for a more social aspect to investing, and if the influx of recent TV network partnerships and celebrity spin offs are any indication, this is apparently the place to be for investors and entrepreneurs alike.