How crowdfunding is changing the economy and supporting creative businesses

Crowdfunding is a way for innovative creators to gather the funds for their project by convincing individuals to pool their money in support of the project’s development. Often, these projects are creative works by artists, filmmakers or musicians, independent business endeavours from up and coming entrepreneurs, or a way to fund non-profit organisations. People with awesome, ground-breaking ideas can post information, videos and photos that can express their idea to the public and encourage them to back their idea. Donations can range from $1 to thousands of dollars, each with their own unique incentives decided by the project co-ordinator. Although it may once have been seen an idealistic dream or ‘hipster’ oriented concept, crowdfunding has become a legitimate fundraising model in its own right.

You’d be hard pressed to find someone who hasn’t heard of crowdfunding sites such as Kickstarter or IndieGoGo, and the amount of users proves how successful the system can be for those with unique ideas. Kickstarter alone has gathered over $1 billion from 7.6 million people to fund 75,000 creative projects since its launch in 2009.

Although seen as a modern idea, crowdfunding has actually been around for centuries. Wolfgang Amadeus Mozart and Mark Twain are amongst two world famous, historicalcreative geniuses, who used a similar system to raise money for their work. They would collect money from donors known as ‘subscribers’, often offering an early edition or copy of the finished piece, or a similar incentive. Modern day crowdfunding is an evolution of this original idea, made even more effective through the wide reach of the internet and social media, allowing individuals to show their idea to markets around the world, creating interest and finding potential donors.

Not only does crowdfunding help people follow their dreams and bring their creations to life, the powerful scheme also ensures more people are working at any given time, generating more money for the economy and reducing unemployment at a time when conventional jobs are sparse and many people are looking to make money independently. Since the beginning of our current recession, many businesses have suffered and crowdfunding can help raise the money they need to move forward. The success many small businesses have enjoyed thanks to their campaigns is encouraging to those new to the business market who are looking to break into entrepreneurship, proving they have a chance at getting their ideas off the ground.

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