What is Crowdfunding

  


          

  

  Crowdfunding is a platform that has generally been used to raise funds for entrepreneurial endeavors. Investors, also known as backers have the ability to contribute to campaigns of various interests. There are rewards set for each level of funds you contribute. Those that help fund these campaigns are called backers. Aside from business and technology, socially motivated campaigns have the best chance of becoming fully funded on crowdfunding platforms.  

  The Jumpstart our Business Startup Act or Jobs Act, was signed into law by President Obama in April of 2012. It was created to allow individuals and groups the opportunity, to invest in small businesses by easing various security regulations; That year crowdfunding globally was worth $2.7 billion. 

  In 2014 crowdfunding globally rose 167% and was valued at $16 billion, 2015 estimations were $34 billion. Entrepreneur.com estimates crowdfunding raises two million dollars on a daily basis. The source also states crowdfunding created forty thousand jobs in 2014.These numbers highlight the tremendous growth of crowdfunding in a short amount of time. However, things are not as rosy as they appear.

 Possibly the two largest crowdfunding platforms to date are Kickstarter and Indiegogo. Every day thousands of hopefuls from all over the world, place a campaign on their websites, trying to reach a campaign goal, sadly more than 60% fail. Kickstarter’s public records show only 37% of campaigns reach their funding goal. That number is down from 44% two years ago. Out of two hundred forty-six thousand campaigns in 2014 as many as, 151,000 campaigns failed to reach their goal. Data from crowdfundinsider.com shows Indiegogo had a success rate of 9.3% in 2013 out of 144,000 campaigns. The number one reason for many of these campaigns failing to reach their goals is due to a lack of exposure. Simply put, most people fail to reach an audience big enough to support their project. Other than campaign flaws one big reason for such a high failure rate is many people do not even know this platform exist or how to properly use it without relying on it as their sole promotional tool.