A brilliant idea is something you have, but the necessary funding is something you are lacking. To distribute your vision to the world a platform is required. The answer lies within the general public. Crowdfunding is a way to gather funds from a large group of people, more recently through the internet. This technique forgoes the tedious process of asking the bank for capital, and eliminates the risk of shelling out a percentage of your company to outside investors. It is also less risky for the ones who fund such projects because they need only donate a small amount, in some situations only $1. The combined efforts of such a large audience makes for a win-win situation. The visionary can make his or her dream tangible and the investors can support this vision without any major risk.
There are a few major players in the monetary crowdsourcing spectrum. The first major avenue in today’s age is IndieGoGo. This site has very loose restrictions regarding what content can be pitched. For example, KickStarter, a competitor, requires a prototype of the product or idea before a request for funds can be announced. IndieGoGo does not require a proof-of-concept. Both of these sites are reward-based as opposed to equity-based, meaning that the one who pledges can receive reward incentives for donating a certain amount of money instead of owning any portion of the company or idea. GoFundMe is currently the most popular as it is the most inclusive of the platforms. G.F.M. can be used to pay off hospital bills, for college tuition, or even trips and there is no deadline.
YouTube has become more commercialized with every month. Google bought the website in 2006, just one year after its inception, and has been losing money on the purchase ever since. They put more and more advertisements within the videos and the website to regain some profit, and have even started a paid service to remove said ads. However, a large portion of users have ad-blockers to bypass the commercials negating any need for the paid service. With the onslaught of ever increasing ads, YouTube (Google) continues to change their policies. The current model now highly benefits advertisers and decapitates content creators. The advertisers can pick which keywords they deem suitable to match up with their advertisements, with the “negative” ones gaining almost no backers. If a creator uploads a video about how to find help when a viewer feels so depressed, they are borderline suicidal, no advertisers will roll their ad before that video because it contains the word “suicide”. This is an issue because the content creators also rely on these ads for their own revenue. Those out there making videos on helping others with suicide, informing others about the dangers of war, or even using any “inappropriate language”, are therefore censored. On a website which actively encourages people to upload their own content, this is extremely hypocritical. Fortunately, where there is a wall, someone will find a door. The door for the content creators is Patreon.
Patreon is a way for a content creator who regularly publishes a product to be compensated for their efforts. YouTubers are flocking to this site which allows their fans to contribute as little as $1 per month to keep their shows afloat. This makes it easy for the followers to support the ones they admire, and eliminates any need for advertisements. Once the YouTuber becomes popular and has enough backers on Patreon, he or she will be able to live off this income and will be able to make videos as their full-time job. The added benefit for the creator is being able to directly communicate with their fans and getting feedback seconds after a new video or article is posted. The donor is given the security of knowing that a new video or blog posting will be provided on a regular basis.
Artists use crowdfunding to publish their books, record their albums, and produce their movies. All of these are extremely expensive to fund alone. Sometimes the artists start campaigns on KickStarter or IndieGoGo and can end up making thousands or even millions of dollars even before the project is done. Inventors who come up with that next “big idea” can just show a blueprint or make a model of their plan and it has the potential to become a reality, without even needing to pitch it to “Shark Tank”. Game developers have the privilege of using a service called Steam Early Access to put any portion of a game onto the Steam storefront and let the gamers test it out and play it before completion. While there have been some major success stories from Early Access, it has fallen under extreme criticism from customers, for developers often not finishing their game and leaving with the acquired funds.
Gathering small amounts of money from a wide pool of strangers may seem like a bizarre concept but it has been happening since at least 1850 when French philosopher Auguste Comte used crowdfunding to gather support for his future work. Asking the bank for money is nowhere near as reliable as it was before the 2008 financial crash. Too many bad loans were given out by banks to prospective homeowners in 2007 in the US and it led to a worldwide meltdown. Now they no longer trust consumers enough to give small business loans. Venture capitalists are still a viable option but having such influence from a small group of people usually means they have equity in the company and they influence the company’s decisions. Therefore the most sensible option in the modern world is to ask thousands of people you will likely never meet. When everyone works together towards a common goal, there is less risk for many and greater rewards for all.