Take a look at the following infographic that we found online which summarizes the crowdfunding phenomenon. Crowdfunding has revolutionized the way that people lend, borrow, fund, and invest. It has, over the last few years, become a legitimate way for start-ups to both validate product ideas, recruit customers, and bring their products to market.
There are a plethora of platforms such as Kickstarter, Prosper, Crowdcube, Fundable, Indiegogo, LendingClub, Uber (Transportation), Airbnb(Hospitality), that utilize crowdfuning to support various endeavors and open up opportunities that otherwise would have been missed.
These platforms, however, are also changing our start-up culture, and naturally, both legal and ethical challenges have arisen. For example, how can we be sure that ‘the right people’ are being supported and how can we prevent backers from being scammed? Crowdfunding gets even more complicated when you consider how it influences government decisions. In Australia, for example, when the government abolished their ‘Climate Commission’, the public donated to have it resurrected as a publicly funded ‘Climate Council’. Australian environment minister suggested that the crowdfunding effort proved that the council should not be a tax-payer funded body. This same argument could result in changes in government support towards, for example, the art community.
As governments, platforms, companies, and individuals navigate through the world of crowdfunding and continuously make changes in order to improve the process, products and services continue to emerge. There have been some great success stories and failures .
One of these success stories, is our client Vavuud, who was recently featured in the Danish paper Børsen. In the article, which you can find here, they discuss their experience crowdfunding on kickstarter, the challenges and risks that exist in a crowdfunded business, and the new product they will be shipping to clients by the end of the year! Check out their campaign here.