As the Internet becomes a more prolific force in the lives of more humans we are definitely going to see greater collaboration using internet enabled platforms. Peter Diamandis speaks of the rising billions in terms of the emerging world’s citizens who are gaining access to the internet. This is extremely exciting as greater access to the internet allows people to collaborate more efficiently. Essentially crowdfunding is human collaboration enabled by Technology. Crowdfunding gives people opportunities that may not have been possible prior to the internet. It is extremely exciting to think about how this can positively affect the emerging world.
If we take a closer look at crowdfunding we will see that this is not a new idea, humans have been collaborating for centuries. Examples of pre-internet crowdfunding are:
- Praenumeration: Subscription business model used to gauge demand before printing books in the 28th century. Not exactly crowdfunding but similar in terms of getting the crowds approval.
- War Bonds: This is essentially the crowd funding war
- Statue of Liberty Base: Joseph Pulitzer’s New York World, raised $102,000 in 1885 from 120,000 donors, with 80 percent of the total received in sums of less than one dollar.
- Rotating savings and credit association’s, or ROSCA: There are many examples across the world where groups of people get together to pool money for particular purposes.
The foundation of crowdfunding via the internet though can be traced to the British rock group Marillion who in 1997 used donations from fans to pay for their US tour. In the same year writer/director Mark Tapio Kines designed a website to raise funds for his then-unfinished first feature film Foreign Correspondents. It was not really until 2003 when Brian Camelio, a Boston musician and computer programmer, launched ArtistShare that crowdfunding really started gaining traction. Maria Schneider’s jazz album “Concert in a Garden.” was the first project on ArtistShare and the campaign raised about $130,000. She won a 2005 Grammy Award for best large jazz ensemble album. This was the birth of rewards based crowdfunding and sites that we know such as Indiegogo and Kickstarter launched in 2008 and 2009.
Debt Based crowdfunding saw its roots prior to the establishment of these rewards based platforms with the establishment of Zopa in the UK in 2004/5 and Lending Club in the USA in 2006. The use of the internet to facilitate the collection of donations was in place long before donation based crowdfunding emerged in 2010 with the launch of GoFundMe, which has raised over $2Billion to date.
In terms of Equity crowdfunding most information you can find focuses on the Jobs Act and America’s process to equity crowdfunding, EquityNet was founded in 2005 for accredited investors. You may not know that ASSOB took equity investing online in 2005 in Australia or that Crowdcube (founded 2010) and Seedrs (founded 2009) out of the UK are two of the most successful platforms for every man on the street.
This was a quick history and I have tried to make sure that it is as factually correct as possible. If I have made mistakes please comment about it.
This is most likely a good place to mention that I an working for a real estate crowdfunding company and together with some others based in Africa we have established the African Crowdfunding Association (ACfA) as a way to educate more and ensure that crowdfunding can impact Africa in a positive way!!!