Crowdfunding Day takes place every March 14 to raise awareness about the usefulness of crowdfunding and to educate startup founders and organizations on how to leverage it. Did you know that crowdfunding is an old concept and has been in existence since the 13th century? It is the act of giving money to a cause or venture by raising small amounts from a large number of people. With the Internet, crowdfunding is now largely online.
History of Crowdfunding Day
Crowdfunding dates back to the 1300s when wealthy individuals would pool money together to fund risky business ventures. Authors had also employed a subscription crowdfunding model, where books are published once they have garnered enough interest to support their works. It was, in fact, this model that Alexander Pope used in 1713 to finance the translation of the ancient Greek poem, the ‘Iliad.’ Alexander got paid in advance for the work with the promise to release one volume per year and acknowledge the donors in the book’s first editions. Mozart also got crowdfunded to perform his three new piano concertos. In return for the funding, Mozart gave the 176 donors a concert manuscript with their names and his thanks.
In 1885, the U.S. government lacked the financial resources to assemble the Statue of Liberty and build a base for it; a tier-based crowdfunding model was used to raise funds. This crowdfunding by Joseph Pulitzer was launched via his newspaper “The New York World.” In exchange for $1 and $5 donations, the newspaper offered six-inch and 12-inch versions of the statue, respectively. The campaign raised over $100,000 from 160,000 donors. The first use of crowdfunding on the internet occurred in the arts and entertainment industry. In 1994, the Vegan Society ran a successful campaign to produce the “Truth or Dairy” documentary. Leveraging the success of this campaign, the British rock band Marillion raised US$60,000 in 1997 through online crowdfunding from fans to fund their entire U.S. tour.
In 2001, the American producer Brian Camelio launched ArtistShare, the first online crowdfunding platform. Using ArtistShare, the jazz artist Maria Schneider received sponsorship for her record, which later won a Grammy Award. As crowdfunding became popular and the model matured, crowdfunding websites started popping up. That included the likes of Kiva (2005), The Point (2008), which later became Groupon, ‘Indiegogo’ (2008), Kickstarter (2009), MicroVentures (2009), GoFundMe (2010), and YouCaring (2011). Today, crowdfunding is a big industry in the United States, and over $17 billion is raised yearly through it.
Crowdfunding Day timeline
Alexander Pope generates funds through a crowdfunding model for the translation of the ‘Iliad.’
The Pulitzer’s newspaper “The New York World” raises money for the Statue of Liberty.
The British rock band, Marillion, receives $60,000 in donations to fund their entire U.S. tour.
Avenues for businesses raise capital through crowdfunding on platforms such as GoFundMe.
Crowdfunding Day FAQs
Does Crowdfunding really work?
Crowdfunding works if you put in the necessary work, promotion, and attention. Crowdfunding is considered the best way to raise money for a business, over angel investors and venture capital.
Does crowdfunding need to be paid back?
That depends on the type of crowdfunding campaign you want to run. Donation-based crowdfunding does not require payback. But other types such as equity-based, rewards, and debt-based crowdfunding require you to either give away a share of your business, give something in return, or pay back the funds.
How much can crowdfunding raise?
That depends on the type of crowdfunding you opt for based on government regulations. Regulation D crowdfunding allows you to raise an unlimited amount from accredited investors, and Regulation A+ crowdfunding allows a maximum of $1 million. With Regulation crowdfunding, you can raise $5 million per year.
How to Observe Crowdfunding Day
Crowdfund your business
Do you have a business you want to launch and don’t have the capital for it? Use the opportunity that Crowdfunding Day offers and kickstart a crowdfunding campaign for your business. You need to sign up on a crowdfunding platform that aligns with your funding needs to get started. That can be platforms such as iFundWomen, Kickstarter, GoFundMe, Wefunder, and Fundable.
Donate to crowdfunding campaigns
If you don’t have a business that needs funding, you can contribute to someone else’s crowdfunding campaigns. Check social media or crowdfunding platforms for ongoing crowdfunding campaigns and donate a couple of bucks to the one that attracts you. Another way to donate is to offer publicity for engaging campaigns using your social media pages.
Learn what makes a crowdfunding campaign successful
Each crowdfunding campaign has a unique story that made it successful. You can use this Crowdfunding Day to learn about them using online resources on business and crowdfunding new sites and crowdfunding platforms.
5 Fascinating Facts About Startups
Half don’t survive infancy
About 50% of all startups fail within their first five years.
Almost all Millennials want to launch them
Up to 67% of Millennials have a startup as a career goal.
They start as a side hustle
70% of startup founders incubated their ideas while working with another company.
Their owners are older than you think
There are more startup owners between 50 and 59 than any other age group.
Startup unicorns are not magical or rare
There are over 475 active startup unicorns worldwide, with a total of about $1,394 trillion.
Why Crowdfunding Day is Important
Crowdfunding is an easier way to raise capital
Crowdfunding is one of the easiest ways to raise capital for a startup. It is not about giving up a piece of your business or accumulating debts by getting funds from investors, unlike other sources such as venture capital, bank loans, and angel investors. Also, the process of running a crowdfunding campaign is much easier than that of applying for loans or investments. Most times, you need to sign up on a crowdfunding platform and share details about your business and a motivation video.
Crowdfunding offers cheap marketing and publicity
The success of a crowdfunding campaign can help publicize a business to a broader audience. This can help to attract investment from traditional sources.
Crowdfunding hedges risks
Kickstarting a business may require several expenses, depending on the type of business you want to launch. Crowdfunding helps offset some of these costs and gain market validation for your product before properly taking it to market.
Crowdfunding Day dates