Crowdfunding: Coming Together to Build a Better Tomorrow
According to the old saying, “two’s company, three’s a crowd.” But in the 21st century, a crowd—rather than something to disdain—can often be a force for good. Just consider the rise of crowdfunding: the practice of funding a project or venture by raising monetary contributions from a large number of people, typically via the Internet.
Just about everyone who’s ever browsed the web has stumbled upon sites like Kickstarter, GoFundMe or Indiegogo, where a vast array of projects have attracted contributions from ordinary folks. In 2013, the crowdfunding industry grew to more than $5.1 billion worldwide, according to a recent Forbes article. Thousands of entrepreneurs have already used crowdfunding’s power and reach for launches and growth. Most of that growth has come from the world’s developed economies, but crowdfunding’s true potential might lie in emerging markets. A 2013 World Bank report predicts that crowdfunding in China could reach $50 billion by 2025—and other emerging economies like Brazil may not be far behind. According to Forbes, here are the top five business crowdfunding campaigns of all time:
1. The Pebble E-Paper Watch: Famous for being Kickstarter’s breakout success, the Pebble E-Paper Watch raised $10,266,845 in 37 days. Crowdfunding backers jumped at the chance to be one of the first to own a Pebble watch, one of the first affordable smart watches on the market. Pebble delivered their first round of smart watches 10 months after their crowdfunding campaign ended
2. Ouya: The Ouya open-source game console took the gaming community by storm, raising over $8.5 million in 29 days via Kickstarter. Ouya was able to deliver their game console to rewards crowdfunding backers within 10 months of launching their fundraise.
3. Pono Music: Pono is a recent Kickstarter success, promising to deliver a music listening experience unlike any other — so you hear the music as the artist intended. With over $6 million raised in just 30 days, the high res music player is scheduled to be delivered to crowdfunding backers this October.
4. Bitvore: Bitvore provides an answer to the big data dilemma faced by businesses, allowing them to monitor and analyze large continuous streams of data. They launched an equity crowdfunding campaign on Fundable and closed a $4,500,000 round to further develop their product.
5. The Dash: The Dash are the world’s first wireless smart in-ear headphones. Part music player, part fitness tracker, The Dash raised $3,390,551 in 50 days. The rewards crowdfunding campaign on Kickstarter promises that The Dash will be delivered in October and November of this year.
“As a tool for launching new business ventures, crowdfunding is rapidly gaining in importance, not just in the U.S, but also worldwide,” says Sunny J. Barkats, founding partner of JSBarkats, PLLC, a full-service business law firm located in New York City.
Barkats, who has analyzed crowdfunding techniques and who was recently named by Thompson Reuters’ subsidiary Super Lawyers® as among the best corporate securities & finance attorneys in New York for 2014, adds, “A decade ago, few could have predicted the popularity of crowdfunding, but today it is has established itself as a mainstay for startups and individuals intent on pursuing a project. The ultimate extent of its influence is still to be seen.”
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