#Crowdfunding – Your pot of $$$ at the end of the digital rainbow | 4BC, ABC
Got a great idea, but the only thing holding you back is money? Then fret not, the internet may have a way to get your idea from aha to oh yeah – crowdfunding.
The traditional route to fund great ideas has always been from savings, parents, relatives, friends, banks, venture capitalists, angel investors and listing, but increasingly this is being gazumped by crowdfunding, online portals that match up those looking for money with those willing to invest.
The major difference between old and new is that instead of getting the money from one source, you will get it from many people, each unknown to the other, all willing to contribute different amounts of money towards your innovation / invention.
Most of these sites work on a similar model, join the site, describe your idea, why it’s special, what outcomes you expect, how much money you need, what you’re offering in return and when you need the money by and then send it live.
On most sites if you raise all the money you’ve asked for, by the due date you specified, you’ll receive the funds collected (minus site commissions and charges), if you don’t raise all the money by the due date you specified then the money is not collected, investors aren’t out-of-pocket and you don’t receive any money at all.
In 2011, the year these sites started to gain marketplace traction, there was about $1.5 billion in funds raised across all crowdfunding sites, last year that total figure rose to $10 billion and it is expected to double to $20 billion in 2015.
There are thousands of crowdfunding sites, including:
General: gofundme, kickstarter, indiegogo, pozible
Education: projected, adoptaclassroom, donorschoice
Philanthropy: kiva, razoo, giveforward
Medical: gofundme,healthline,fundrazr
Music: pledgemusic, sellaband, oocto
For a list of more crowdfunding sites, divided into categories, click here and for an alphabetical list click here
For more insights on Crowdfunding have a listen to a couple of the radio segments I’ve recently done…
Clare Blake – 4BC (19 minutes 30 seconds)
David Dowsett – ABC WideBay (6 minutes 35 seconds)
Frequently Asked Questions
Q: What does crowdfunding actually represent as a financial and social signal?
Crowdfunding represents multiple signals simultaneously: the technology signal that internet platforms can aggregate small contributions from distributed individuals at scale with low transaction costs — a genuine financial infrastructure innovation; the trust signal that people will extend small amounts of capital to strangers for products, creative works, or causes they find compelling — a meaningful extension of the geographic and social range of capital formation; and the validation signal that pre-sales and community interest can substitute for institutional capital assessment in many early-stage situations. The most significant structural implication is that the traditional capital gatekeepers (banks, venture capital, institutional investors) no longer have exclusive access to the mechanism of connecting capital with opportunity — the internet has created an alternative channel that is particularly relevant for smaller projects, community-oriented ventures, and creative works that institutional capital systematically underinvests in.
Q: What determines whether a crowdfunding campaign succeeds or fails?
The research on crowdfunding campaign outcomes reveals patterns that go beyond the quality of the project: early momentum is disproportionately important — campaigns that reach a significant percentage of their target quickly signal social proof that accelerates further backing; the specificity and clarity of the value proposition matters more than in traditional marketing because backers are making real financial commitments rather than expressing abstract interest; community building before launch (an existing audience who convert to backers) is a stronger predictor of success than the quality of the campaign page itself; and the reward structure (for reward-based crowdfunding) needs to feel proportionate and distinctive — backers are not just investors, they are participants in the story of the project, and the reward design communicates how seriously the creator values that participation. The failure pattern is almost always: insufficient pre-launch community, inadequate early momentum, and gradual decay of the social proof signal.
Q: How has crowdfunding developed since 2015, and what does it reveal about the future of capital formation?
Since 2015, crowdfunding has differentiated into distinct models that serve different purposes: reward-based crowdfunding (Kickstarter, Pozible, Indiegogo) has become a standard tool for creative and hardware projects, with a mature set of success patterns and failure modes; equity crowdfunding (enabled by regulatory changes in Australia from 2017) has grown but remained smaller than reward-based in volume and impact; and community investment models for social and environmental projects have emerged as a distinct category. The broader lesson is that crowdfunding has not replaced traditional capital formation but has added a genuinely new channel that is better suited to some purposes — community validation, pre-sales, creative project finance — while remaining less suited to others, particularly large-scale capital requirements and projects requiring patient institutional capital.
Q: How can I book Morris Misel for a financial technology, small business futures, or entrepreneurship keynote?
Contact the team at morrismisel.com/event-organisers.
Got a great idea, but the only thing holding you back is money? Then fret not, the internet may have a way to get your idea from aha to oh yeah – crowdfunding. The traditional route to fund great ideas has always been from savings, parents, relatives, friends, banks, venture capi.
When signals like #Crowdfunding Your pot of $$$ at the end of the emerge, organisations that engage early have the advantage of choosing their response rather than reacting to events. That gap between those who prepared and those who did not is where competitive positioning is actually made or lost.
The most important question is not whether #Crowdfunding Your pot of $$$ at the end of the will matter, but how quickly it will matter in your specific context. Leaders benefit most from mapping the ripple effects early — not just the direct impact but the second and third-order consequences that arrive later and hit harder. That is the practical work of foresight.
