Today consumers no longer want just to buy a product or use a service. People want to experience it together, generate content for their brands, help develop products with ideas and even fund new businesses.
With the advent of the internet and cloud-sharing technologies, this kind of public participation has become increasingly easy and commonplace.
According to a study published in the Harvard Business Review by Jeremy Heimans and Henry Timms, crowdfunding is considered one of the most powerful forms of consumer engagement and participation, in the production and consumption of products or services.
See this table in which the authors illustrate this:
In this post, let’s better understand what crowdfunding is and how it works and learn about 5 successful multi million dollar projects that have been funded in this way.
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What is crowdfunding?
Through a website and even applications on mobile devices, an entrepreneur presents an idea for a new business, product or service.
This project is visible on the crowdfunding site for anyone who wants to analyze it and those who are interested in investing in it, can deposit an amount through the site’s interface.
There are crowdfunding projects in which stakeholders pre-purchase the product, even before it’s launched, and others where people become small partners of the venture (or large, depending on how much they invest).
Taking advantage of this concept, many startups have benefited from this model and have managed to make their business viable. It has become a popular way of opening your own business with little money.
There is also crowdfunding devoted exclusively to philanthropy and the financing of humanitarian projects.
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Some of the best-known crowdfunding sites
We’ve selected 5 crowdfunding sites that have stood out or were pioneers.
Afterward, we’ll show you the 5 crowdfunding projects that have raised the most money in history!
Kickstarter
One of the first crowdfunding platforms, Kickstarter is widely used by artists, game developers, inventors and even people trying to launch a series of comic books.
Bringing life to new ideas is the inspiration behind Kickstarter.
Crowdfunder.com
More focused on high-end investors, many companies that start on Kickstarter and other platforms, end up turning to Crowdfunder.com to get even more money.
Crowd sourced venture capital is how this platform defines itself.
IndieGogo
A more open platform, in IndieGogo you can find such diverse products as solar energy minis that charge your cell phone and people asking for advice to solve their financial problems.
Do you have a book that you dream about publishing, do you want to release that crazy gadget that will make you a millionaire, or have a community cause that needs help? Use IndieGogo.
It isn’t necessarily the focus of the platform, but it doesn’t inhibit this type of initiative.
RocketHub
At RocketHub there are some extra features to help entrepreneurs spread their ideas and projects and get funds faster, as well as tips on entrepreneurship and even an internet marketing toolkit.
Crowdrise
Finally, Crowdrise is entirely focused on non-profit businesses and charity events such as charity dinners and street races.
There’s also the possibility of engaging your company’s employees in humanitarian causes or helping people involved in a cause.
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The 5 crowdfunding projects that have raised the most money
Based on fairly reliable sources, this Wikipedia article points to the following projects as the ones that collected the most from crowdfunding platforms:
- Star Citizen A video game that raised around $151 million and now appears in the Guinness World Records for attaining this amount.
- The DAO A non-governmental organization that functions as an independent crowd funder, where members vote on which projects they will carry forward. It raised $150 million dollars
- Elio Motors A manufacturer of 3-wheelers that has raised $ 102 million.
- MobileGo A gaming platform for smartphones designed to generate user loyalty through gamification. Funds raised: $ 53 million.
- Basic Attention Token A digital ad system based on blockchain that made $ 35 million in investments.
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