Crowdfunding – it’s not a new approach but it has been revolutionised in recent years by the creation of online crowdfunding platforms. It’s a great way to raise finance – you ask a large number of people to fund your project by each contributing just a small amount of money. There are more than 1,250 crowdfunding platforms worldwide, and in 2014 the total amount raised globally throughwas $16.2 billion (Canada Media Fund, 2015).
Crowdfunding platforms range from international ones such as Kickstarter and Indiegogo through to locally based ones such as Spacehive. Some target specific markets. Symbid is a global equity crowdfunding platform and BitGiving helps social organisations and individuals.
Crowdfunding can play a vital role in DSI where access to finance is a big barrier in getting project ideas off the ground.
These are the stages in the crowdfunding process.
- Pitch – you pitch your idea to the crowdfunding platform. You’ll need a project idea, funding target, supporting materials like a video, a clear return for funders, funding deadline, etc.
- Screening – the platform checks that your pitch meets its criteria. If it’s approved, it goes live on the website.
- Pledge – people pledge to your project within a set deadline. It could be money or something else like time or an item.
- Deadline – if you don’t meet your funding target when you reach this some platforms return what you raised to your pledgees, but on other platforms you get what was pledged.
- Delivery – if you get funded you need to deliver your project.
If you want to find out more about crowdfunding, Nesta’s report is a good start: Working the Crowd: A Short Guide to Crowdfunding and How it Can Work for You (Nesta, 2013).
Activity 5 Exploring crowdfunding
Research some crowdfunding websites and make some notes about the most interesting project you find that has a link to smart cities.
You’re almost at the end of Week 5. Next, try the quiz that wraps up the week.