Crowdfunding Websites Gain Popularity, Entrepreneurship Flourishes

Crowdfunding Websites Gain Popularity, Entrepreneurship Flourishes

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Wish you could have gotten in on big names like Instagram and Pinterest when they were just wee startups? A growing number of investors interested in getting into startups, has influenced a movement called crowdfunding which allows individuals to do just that.  The idea is blowing up at the moment.  In 2007, 100 platforms to crowdfund existed, now there are 450 forums worldwide.  Kickstarter is the largest in the US.

Before February 1, 2012 no single project had raised over $1 million, now there are 7. Research firm Massolution projects that $2.8 billion will be raised worldwide, up from $1.5 billion in 2011 and $530 million in 2009.

Even the indie films are receiving funding through these forums.  10% of the films shown at the Sundance and Cannes film festivals were crowdfunded.  The arts are finding major contributions coming from crowdfunding as a whole (see them here). Charity also sees significant donations coming from the crowdfunding sites.

Legislation

Through the Jumpstart Our Business Start-Ups act (JOBS), this new way to fund small businesses are gaining momentum and growing exponentially.  Some even think this is the future of how small businesses will get their feet off the ground.

Part of what the JOBS act will do, under forthcoming SEC regulations, is limit the amount of money one individual can place into a firm.  This preserves the foundation of crowdfunding.  The UK has similar laws.  It is also generally harder to get cheated when using crowdfunding to invest in a startup.  An individual is usually much easier to con than a group of people.

Big Business Crowdfunding

Google (GOOG) and General Motors (GM) plan on using crowdfunding to test what clients are looking for in their product lines. For example, if GM tries to crowdfund a new vehicle and no one invests, they infer that they should not build it.  But if they crowdfund a vehicle that many people want to invest in, they take it as a signal to go ahead with production. For these cash-rich firms, crowdfunding is less about the money and more about the consumer insight.

In no particular order, here's a list of some popular crowdfunding websites:

1. WeFunder

2. Startup Addict

3. Believers Fund

4. Rockethub

5. Quirky

6. New Jelly

7. CoFolio

8. KickStarter

9. Start Some Good

10. Peerbackers

11. Eppela

12. Indie Go Go

13. Microventures

14. RocketHub

15. 33needs.

16. Appbackr

17. ChipIn

18. FansNextdoor

19. Cofundos

20. Ulule

 

 

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