Everyday, we see a bunch of students rejecting high payment packages from companies and instead treading down the road to set up something of their own. Close to 25 percent of students from IIT this year have voluntarily chosen not to be a part of the annual campus placements because they want to start their own venture with a group of like-minded passionate friends.
This may sound like a very good idea on paper in the beginning, but eventually you’d come to terms with the fact that dreams need money to be brought to life. This is where the concept of crowd-funding comes to your aid.
Crowd-funding as the name suggests is a process where people help an individual, a cause, start-up or aid an expansion of existing business, through collectively donating money, showing support or contributing to the project in return of a service or stake in the venture.
Crowd-funding has its origins in the concept of crowd sourcing, which is an extended concept of an individual reaching a goal by receiving and leveraging small contributions from many parties. Crowd-funding is the application of this concept in order to finance a particular project or venture.
Start-ups and self-made independent individuals or businesses are one of the most frequent users of crowd-funding. Apart from them, social causes, creative ventures, small business and even crisis-situation, for example medical emergencies are offered help through sites operating online.
According to Glen Philips, lead singer, Toad the Wet Sprocket, who used Kickstarter – one of the largest crowd-funding websites out there, for generating funds for bringing their record album into the market, “We knew we had an audience that had been waiting for us since a long time, to make a record and we wanted to make one that wouldn’t disappoint them. As we were looking at a traditional record deal, it would have probably made things needlessly complicated from the very beginning.”
“This seemed like the best option for us. It was a great way of being able to cover the cost of producing the album while also creating a story with the people who really cared about it. It’s kind of a win-win situation. They get vinyl or special packages, more songs, EPs etc, which other people don’t get. We end up owning a record with no debt and a little left over for promoting it. Everybody’s happy.” He added, in an interview with Mashable.
Freddie Wong, who is using Indiegogo, to crowd-fund the third season of his web series ‘Video Game High School’, says, “We as creators can be supported by our audience. We have done it for two seasons, but now it’s time to send a clear message to the world; together let’s change the way movies and TV shows are made, watched, and funded. We believe we’re on the verge of a creative revolution – the intersection of independent and capable content creators with a system for an audience to fund projects means that, for the first time in film history, the gatekeepers of content have been made obsolete.”
In India the most famous crowd-funding website is ‘Wishberry’, which operates in the similar way as the other websites, where the individual or an organization seeking funding creates a crowd-funding campaign in an attempt to seek contribution from the masses. Quite recently, a lot of indie-filmmakers have turned to Wishberry, to gather support for their creative projects.
“Crowd funding is not just for funding. It tests concepts and relationships and facilitates viral marketing across networks and beyond. It is also getting your groups of fans and supporters together under one platform and really seeing their commitment towards helping your project through their contributions.” says Anshulika Dubey, VP, Wishberry.in.
It is estimated that in 2014, Crowd-funding shall add more than 2, 70,000 employment opportunities in the market. In fact, this popular industry is all set to grow at the rate of 92% in the current year and a study reveals that over the period of 5 years it has grown in leaps and bounds already.
In a situation where dreams are becoming expensive and hard to bring to reality; crowd-funding helps you believe in your goals again and paves a way to get funds to achieve them. The New York Times recently quoted that crowd-funding is a tool to turn your inspiration into reality. If you have a profitable venture, or an idea of one to offer, but are in short of capital, crowd-funding is your new friend.
How to successfully crowd fund your project:
1. Decide the objective of your campaign and create an impressive pitch around it.The cause you intend to put on the webpage should be clearly defined. Further perks you wish or plan to offer to your contributors and well-wishers should be well-thought out too. Do not try to give out more than you can afford. Adhering to your promises is very important as you need a loyal base of fans or customers at this point.
2. Explain your campaign and goal in such a way that almost provokes people to believe in your project and back it up. The catch here is to make the appeal to the audience in a manner where they are self-motivated to pitch-in in your project. Think from a customer’s point of view. Tell them what your project, if funded, can do for them. Offering good deals to the donors in the form of small reward or even acknowledgement, like, mention in the project will make a huge difference.
3. Specify the target budget you intend to raise from your campaign online. Calculate well and be sure of your estimate. In most of the websites you are required to specify deadlines i.e. state a time limit to raise the money. This is because websites allow you to raise specified amount only for a certain period of time to minimise the number of forged projects. Thus it is very important to be quick and persuasive enough to ask for contribution.
4. Spread the word amongst your friends and professional connections to ensure maximum back-up. Social Media can go a long way in making this possible. Even if a few people cannot contribute for various reasons, they might end up sharing it with someone who can or will be willing too!