The Future of Crowdfunding Around the World

global-crowdfunding-day

This Saturday, April 5, marked the two-year anniversary of the signing of the Jumpstart Our Business Startup Act (JOBS Act), which paved the way for “equity crowdfunding” in the United States.

This year, the crowdfunding community celebrated that anniversary as Global Crowdfunding Day. While rules are still being drafted to make equity crowdfunding a reality in U.S., the broader crowdfunding world has already grown by leaps and bounds since that act was signed into law.

Simply put, crowdfunding allows anyone to invest in making an idea a reality — whether it’s a new product, a business, a book, movie, album, or video game, or a charitable project. By harnessing the power of the Internet and social media, crowdfunding platforms let people with innovative ideas harness donations as small as $1 from thousands or tens of thousands of people around the world who share their enthusiasm.

Someday, equity crowdfunding will allow these contributors to earn a return on their investment when they invest in a project like Oculus Rift, which was recently bought by Facebook for $2 billion. In the meantime, however, there is no shortage of creative ideas and potential in the crowdfunding community.

Traditional crowdfunding platforms — where contributors give money with no expectation of a financial return — have been growing at a dramatic pace. In the last two years, Indiegogo has grown by more than 1,000 percent, and Kickstarter recently surpassed $1 billion in projects funded. Crowfunding continues to expand into new territories and new areas of interest, and while some of these may not succeed, they show that this model is still far from reaching its peak potential.

The growth of crowdfunding as an advocacy tool has been particularly interesting, making it easier than ever to raise money for popular causes. At Diplomatic Courier, Daniella Foster, co-founder and CEO of the Emergent Leaders Network and Director of Public-Private Partnerships at the State Department, notes that even governments are getting in on the act — potentially giving citizens a new way to have their voices heard and making it easier to invest in creative new ideas across national boundaries.

The last two years have seen an explosion of growth and experimentation for the crowdfunding community. We can expect to see even more innovation in the next two years as these platforms mature into a viable financial platform for entrepreneurs and small businesses around the world.

Jon Custer is Social Media / Communications Coordinator at CIPE.

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