If you were to Google the term “Crowd Funding”, or visit some of the more credible sites that act as a hub for the industry, you will see that proliferation of Crowd Fund Investment sites, and the domination of news around the growth of this form of e-commerce. In all the noise around investment crowd funding, it is easy for us to lose sight of the very nature of what a great breakthrough the true form of “Crowd” “Funding” has been and how it continues to offer us all a game changing way of funding our passion.
When the emergence of the internet collided with microfinance in the timely environment of the GFC, Crowd Funding represented disruptive technology, the likes of which had never been seen before. Conventional thinking taught us that you traditionally gave money in return for goods or services, and crowd funding went against everything we had previously known. All of a sudden, people were pledging their support based on them knowing or liking the project creator, or due to passion for seeing the project come to life. Convention had been thrown out the window, and we now had a brand new paradigm.
With the introduction of crowd funding, communities now had a tool for building and engagement. This tool was one that helped to share their passion to people who sought to be involved rather than in exchange for a financial return or a slice of the action. It was all about being part of a movement, a shared zeal for what they believed to be right or what was needed rather than receiving a tangible reward. This was commerce based on “the greater good” rather than an exchange of cash for goods and services.
Crowd funding is built on passion and shared enthusiasm. It is about building tribes, and bringing people together based on their belief in a cause or an outcome. Logic does not necessarily come into it, and just like passionate sporting fans united in supporting their team, crowd funding unites those with common interests and beliefs. Their unification builds momentum, euphoria, and (most importantly) delivers results because it is collaboration based on beliefs rather than the only thing uniting them being the fact that they are co-investors or just another customer of a venture.
Philanthropy, charities, and the whole “art of giving” were given a new realm and dimension with the birth of crowd funding. All of a sudden, their message could be carried further than their simple “shoe leather” activities could ever deliver. Resources could be better utilised and maximised by the power and reach of the internet. Philanthropists were able to give money anytime, day or night, and in a manner that was so much easier than having to make bank transfers, post a cheque, or hand deliver their contribution to the charity.
Crowd funding is not just about making pre-sales, but about engaging loyal customer following. People not only buy the product of the project creator, but they share in his story. They don’t invest, but are invested in the movement, and become advocates for the evolution and progress of the company or concept. Investment is singular in dimension – crowd funding is multifaceted and delivers a deeper, stronger, and longer lasting tie between the project creator and their crowd.
Let us not allow crowd funding to totally shift to being a vehicle just for investment. Crowd funding has brought us a great instrument for building communities and for funding passion. The true essence of crowd funding in the form that has been so popular in recent years has been built on need rather than greed, and it is the purity of true crowd funding that has seen so many projects succeed for all the right reasons. Sure, equity crowd funding has a wonderful role to play in society moving forward, but let us never let the light dim on the pledge model of crowd funding that exists and thrives today for all the right reasons.