From the U.S. to Greece, the global economy is making it harder then ever to raise funds. But now, thanks to the convening power of the Internet, there's a new path to capital.
The concept is called crowdfunding, and it's changing the way people fund their ideas at a time when traditional forms of financing, such as bank loans and government grants, are scarce. My company, IndieGoGo, is one of the world's largest crowdfunding platforms. It allows people to create capital-raising campaigns for just about any goal -- whether it's to open a coffee shop, manufacture a new tech accessory, produce a documentary or pay for a costly medical procedure.
Crowdfunding was born in the late 1800's when the Statue of Liberty, a gift to America from the French, almost didn't make it across the Atlantic because the government couldn't come up with the $300,000 needed to build a proper pedestal for Lady Liberty. Thankfully, Joseph Pulitzer, the publisher of the New York World, turned to crowdfunding, calling on the public for small donations in the pages of his newspaper. The five-month campaign generated $100,000 from thousands of micro-donations -- many of which were in increments of less than a dollar.
So who's using crowdfunding these days? Since IndieGoGo launched in 2008, more than 40,000 campaigns from over 200 different countries have been started on the site, resulting in millions of dollars distributed across the globe.
In the coming months, we'll introduce you to the extraordinary entrepreneurs behind some of the most ground-breaking IndieGoGo campaigns in a series called The CrowdFunders. Forthcoming posts will feature successful campaigns in small business, technology, music, film and health. CrowdFunders will reveal on camera why they decided to use this new form of capital-raising, how they did it and what they've accomplished with the money raised.
The CrowdFunders chronicles a new generation of tech-savvy go-getters who are utilizing a revolutionary form of financing to overcome today's economic malaise. Below are just eight of their stories, a taste of what's to come:
In 2009, the Greek economy collapsed, tourism rates plummeted, taxes sky-rocketed, and eReaders pinched hard on book sales. As austerity became the new normal in 2010, Atlantis Books found that its methods of importing stock and utilizing retail space were no longer sustainable. Goal: $40,000 Money raised: $40,570 Where they are now: Instead of having to close because of financial issues, Atlantis Books is thriving and has started awarding past donors from IndieGoGo their "perk," a stay overnight in the bookstore while traveling.
Big Mama was let go from a full-time job and switched to mowing lawns full-time to make ends meet and lose weight. Goal: $2,500 Money raised: $2,535 Where they are now: Big Mama raised enough money to buy a new lawnmower and is currently mowing her way to a healthy weight.
After nearly three years of trying to conceive, a couple learned that they have a one percent chance of conceiving naturally. To raise the money so they could afford a costly medical procedure that may increase their chances of conceiving, they launched a campaign on IndieGoGo. Goal: $5,000 Money raised: $7,177 Where they are now: The couple has received the emotional and financial support needed to begin the procedure -- fingers crossed!
Awaken Café sought to make its space Ddowntown Oakland's premiere community hub and also showcase its green project. Goal: $3,000 Money raised: $3,538 Where they are now: The cafe provides an example of the revitalization of Downtown Oakland. Awaken's street cart opened in July 2011. The full café, a 2,000 sq. ft. location with indoor and outdoor seating, is on schedule to open in Fall, 2011.
Satarii was turned down by 40+ investors in their hunt for capital to create the Star Accessory, a product that enables your mobile camera to follow your every move. Goal: $20,000 Money raised: $24,680 Where they are now: The Star Accessory is in its first-run of production, with the goal to officially launch in Winter, 2011. Now all they need is a name for the product and have set up an online survey for you to vote.
This campaign sought to raise money to pay the Sustainable Economies Law Center to draft a Petition to the SEC that proposed changing securities law to allow people to raise funds online in exchange for equity in their ventures, which is currently against the law. Goal: $1,099 Money raised: $1,321 Where they are now: Petition was drafted and, after 18 months, made its way to the nation's capital in May.
eMaker Huxley wanted to make 3D Printer Kits available to the mass market, at a reasonable price and with a guarantee of printing success. Goal: $30,000 Money raised: $158,685 Where they are now: Between sourcing, printing and packing, eMAKER Huxley 4 has been assembled and commissioned, built from the same bill of materials which will make up each of the 300+ kits sold during their first round of funding.
Banks turned down Emmy's Organics for a small business loan. The maker of gluten-free, vegan and raw foods needed capital to re-design brand identity and distribute through local supermarkets. Goal: $15,000 Money raised: $15,326 Where they are now: Emmy's Organics raised the money to change their packaging, and is now selling in supermarkets and making gluten-free eaters happy everywhere.
Correction: In a previous version of this blog post, the author referred to IndieGoGo as the world's largest crowdfunding platform. However, to account for the variety of ways similar platforms measure their size, HuffPost editors have adjusted the language to say that IndieGoGo is one of the world's largest crowdfunding platforms.
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