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Beverly Macy

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Here's How Important Crowdfunding Is to Innovation and Jobs

Posted: 10/10/2012 7:12 pm

It's election season (duh!) and we're told the focus is on the economy and jobs. Yes, the unemployment figures went down at the end of September to under 8 percent, which is better than before. But there's no doubt about it, the economy and jobs picture in America is still bleak for some.

The hiring inside big multinational corporations is a complex patchwork. It has certainly slowed down and won't return to the good ol' 90s, that's for sure. One reason is that the skills required for even the mid-level jobs have gone high tech and social and workers are ill-prepared. Productivity is also up because of technology. Good for the employer, bad for the headcount because not as many workers are needed.

The bright spot, of course, is supposed to be small business. But small business has its own barriers to entry -- not the least of which is sourcing capital. The options are out there, but can be daunting. I'm a huge fan of the Small Business Administration and their attempt to educate and inform the small business owner of resources, etc.

But face it, it's still hard to get that $15,000-$250,000 seed capital to get your idea off the ground. Innovation, disruptive new technologies and great causes go languishing for lack of that tiny capital to get them started.

Enter crowdfunding. Fueled by social platforms and graphs, crowdfunding has emerged as the potential rocket fuel needed to jumpstart the economy. Back in the summer, the JOBS Act was signed into law. The cool part of the act allows for companies to raise money via "crowdfunding" from the general public. In this case, the public can 'invest' and not just 'donate.'

There's also the crowdfunding platforms like Kickstarter and Indiegogo. Indiegogo co-founder Danae Ringlemann tell me this new process is "democratizing funding - empowering anyone, anywhere in the world raise money for any idea. Until crowdfunding, thousands (if not more) of ideas went unborn every year, not because the ideas were bad or people didn't like them, but because people lacked access to funds to make it happen."

Of course, not every campaign makes it... there are a fair number of failures. In fact, about 50 percent of the campaigns fail. But there are also successes - sometimes spectacular like The Pebble: E-Paper Watch for iPhone and Android which raised over $10 million from over 68,000 'contributors on Kickstarter'! And sometimes practical and down to earth (literally), like Emmy's Organics, who couldn't get a bank loan and raised $15K from customers and friends of customers on the Indiegogo platform.

We're trying out Indiegogo right now for two reasons. 1. to learn first-hand how it works and how it resonates in the marketplace; and 2. to raise capital for production of the 1st season of the new Gravity Summit TV - Where Business Meets the Power of Social Media TV show. We need capital just like every other small business!

The future certainly looks bright for raising capital and unleashing innovation!

Beverly Macy is the co-author of The Power of Real-Time Social Media Marketing and Executive Producer of Gravity Summit TV. You can reach her via email at beverlymacy@gmail.com

 

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