Crowdfunding in 2020: The New Normal for Financing Ideas

Today, we associate the term 'crowdfunding' with online platforms and social media-based campaigns designed to raise money for charities, events, and personal projects.

However, the idea of reaching out to the many in order to elicit donations is nothing new and has, in fact, been around for centuries.

The very base of the Statue of Liberty was built thanks to a crowdfunding campaign initiated by publisher Joseph Pulitzer, who offered to print donors' names in his newspaper in exchange for donations.

Over 160,000 donors responded and within five months, this newspaper-based crowdfunding campaign raised $101,091, just enough to cover the costs of the $100,000 pedestal!

Today, you don't need to own a newspaper or any other sort of medium in order to elicit donations. No, thanks to the internet and crowdfunding platforms like dreamOway.com, all you need to do is craft your message and find the right audience.

Crowdfunding has increasingly become a popular and effective method of raising money for any number of causes ranging from the nonprofits to public works (yes, still!).

The following are a few facts and a few reasons why the crowdfunding future looks so great for nonprofits!

 

1) Crowdfunding became a key financing alternative following the Great Recession and continues as a popular option.

While there were certainly some online crowdfunding action going on before 2008, the collapse of the housing market and financial industry creating a new need for alternative forms of funding. That's because in the wake of the collapse, most traditional banking institutions became less willing or even unable to provide loans and so people turned to the Internet and each other.

 

2) Growth and crowdfunding's future goes beyond the indies.

In pop culture, crowdfunding campaigns are frequently tied to artists and small businesses looking for that first big boost. But that's no longer the case.

Today, just about every organization, from the smallest one-person charity to multi-national corporations are utilizing crowdfunding.

Additionally, personal fundraising has become a key segment of crowdfunding and the crowdfunding future. Personal fundraising is when an individual asks their friends, family members, and other social network members to help them raise funds for, well, just about anything, from funding their wedding to helping the next door veteran get a wheelchair ramp built.

One of the best aspects of crowdfunding is that no cause is too small!

 

3) Crowdfunding offers effective proof of concept.

A proof of concept is what business experts call any small exercise that is done with the aim of testing a product's demand or feasibility. Traditionally, proof of concepts were small one-off things undertaken only to big-name investors, but with the rise of crowdfunding, well, everything has changed.

Crowdfunding campaigns are increasingly becoming a necessary stage for inventors, artists, entrepreneurs, and others to offer up early ideas to the public, test the demand, and garner feedback.

 

4) Crowdfunding is increasingly becoming a necessary first-step for startups.

Proof of concept is not just needed for the solo entrepreneur to understand the worth of his or her invention or new service offering. One of the biggest trends in crowdfunding, and something that provides key insight into what 2020 and the crowdfunding future will look like, is that more and more often venture capitalists are requiring startups and those petitioning them for money to first show them how successful they can run a crowdfunding campaign.

A successful crowdfunding campaign serves as a quality signal to venture capitalists as it proves a product or service is wanted and that the messaging is right to attract the desired market.

 

5) Equity models are also on the up-and-up and a new trending face for the crowdfunding future.

In 2012, then-President Barack Obama signed the Jumpstart Our Business Startups (JOBS) Act into law. This initiated a whole new era of crowdfunding and the true benefits of that law are now being seen today.

Also known as the crowdfunding bill, this law reduced regulatory burdens on small businesses and legalized equity crowdfunding so that entrepreneurs could easily get everyday Americans as well as wealthy investors to buy into their business models.

With this style equity crowdfunding, business owners can go beyond simple funding for a specific project and can, in fact, create new partnerships and long-term, sustainable investment networks.

 

Join the Crowdfunding Future and Create Your Campaign Today

Whatever your needs for financing, you are likely to find exciting opportunities with crowdfunding. Download dreamOway on iOS or the Google Play Store to see real-life examples of successful crowdfunding campaigns. Learn how you can create your own campaign to attract awareness and bring in funds for your project or dream idea.

READY TO START A CROWDFUNDING CAMPAIGN FOR YOUR CHARITY OR NON PROFIT?

 

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