Crowdsourcing is taking on interesting new forms - last week's guest speaker talked about Kiva, a non-profit website which allows you to make a small loan of $25 to be used by entrepreneurs around the world. I found this website to be fascinating. It is truly harnessing the power of digital media to mobilize mass volumes of funds through multiple donors. Moreover, with a philanthropic appeal and a low $ hurdle, it has facilitated loans of ~$220 million in 5 years with repayment rates of 99%, higher than most micro-finance institutions.
I strongly believe this model could be replicated to raise funds for real investment projects in which several investors want to participate. The appeal would be a small enough investment that not raise eyebrows, coupled with superlative returns. But the greatest challenge would undoubtedly be execution. I am certain there will be numerous opportunities in this website format. Wait and watch, or better, participate.
1 comment:
Crowdfunding has been around for awhile. Some of the more recent websites that allow you to fund different projects are kickstarter.com and indiegogo.com. These sites allow people to create projects and ask for funding and in return, the project creator can give the backers some kind of incentives.
However, using this method to fund projects that may have a monetary return on investment may be a little tricky due to US regulations. Pus throwing your site completely out to the public and not knowing if you will be funded or not may become very risky.
The best approach in my opinion is to use the crowdfunding method and target your network. Share your ideas to a few people and see if you can gain traction but for other projects that may not be as sensitive, I would definitely go with the kickstarter or indiegogo route.
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