Crowd Funding

[jean2579]

Can anyone explain it please?

[freakiness]

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@jean2579 wrote:

Can anyone explain it please?

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It's funding sourced from lots of people. Usually a reward or incentive is offered in return.

[jean2579]

Thanks freakiness, we were at the local markets on the weekend and a young couple who started organic farming about 2 years ago were wanting to expand the farm and had brochures out asking for crowd funding. The brochures didn't explain nor did their website, so we were not sure.

[freakiness · Accepted solution]

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@jean2579 wrote:

Thanks freakiness, we were at the local markets on the weekend and a young couple who started organic farming about 2 years ago were wanting to expand the farm and had brochures out asking for crowd funding. The brochures didn't explain nor did their website, so we were not sure.

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have a look at pozible.com or indiegogo.com for some examples and explanation.

Cathy McGowan funded at least part of her campaign by crowd funding.

[poddster]

In other words it when someone either does not have the funds or is not prepared to fund their project themselves.

They just want to reap the benefit without risking their own funds. There are lots of gullible donors it seems.

[lynny_oz]

There are many people who donate to crowdfunding projects to help save the lives of sick children.

Do you think these people are gullible?

[freakiness]

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@poddster wrote:

In other words it when someone either does not have the funds or is not prepared to fund their project themselves.

They just want to reap the benefit without risking their own funds. There are lots of gullible donors it seems.

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What happened to make you so bitter about other people?

Would you rather people go on welfare or create opportunities for themselves. They do have to offer a reward of some sort for any funding they secure.

[poddster]

Do you think that making people aware of potential scams and being taken advantage of as bitterness??

I see it more as a community service, alerting people to be aware of someone who may be taking advantage of them is a good thing don't you think?

[not_an_eloi]

http://en.wikipedia.org/wiki/Crowdfunding

mate took an invention that he'd developed a prototype for, to 'the inventors' show

invention was a great idea, mate was seekin' investors for capital as a start-up, to tool up,

and to cover patent costs.

found it was near-impossible to get that from normal sources.  'is grandkid set up a

crowd fund, he raised dough through that, to take the thing to the next level

in the production.   paid it all back within a couple of years.

some poster 'ere, has a kiva loan thread, kiva loans are an example of crowd fundin'  

there'd be a stack of risk involved.  if you can't afford to lose the dough, don't risk it.  aye.      

[poddster]

Just something that makes sense I found

PRO - Complex, difficult, and niche ideas get funded.  Entrepreneurs not constrained to 5-7 year payback windows can pursue models with high creativity, democratized invention, and positive externalities in society.  Unusual companies (such as Copenhagen Suborbitals, a Dutch space company sending humans into orbit) have the opportunity to form, recruit sharp minds and push boundaries.

CON - Crazy ideas get funded.  More ideas get funded today than can possibly return capital, but with crowdfunding the percentage of successes markedly decreases.  A lion's share of crowdfunded investments will never make money and investors will be out-of-luck.  While small, fragmented investments limit the catastrophic risk to any single investor, too many failures will give crowdfunding a bad rap and prompt regulatory tightening.

Crowdfunding in some form or fashion will inevitably increase over the next few years.  Companies requiring stealth or huge amounts of startup capital may continue to be funded in more traditional ways.  Venture capitalists will still plug the funding gap for growth- and later-stage companies.  However, in the immediate term, crowdfunding is poised to alter the entrepreneurial ecosystem significantly - just like angel investing, venture capital, and private equity before it.