Crowdfunding - From tiny acorns to mighty oaks?
Crowdfunding is all the buzz at the moment, but can you really grow a mighty oak by gathering tiny acorns?
There are many issues facing the small producer and top of the list is usually the financial support you need to get a new venture off the ground. In which case, crowdfunding may an option.
Crowdfunding is a simple concept. You gather together enough interested people, usually via a specialist website/platform and each contributes a small amount to your project. It’s that simple and is often used to finance creative industry projects such as independent film, new music and journalist sites. It works (well, sometimes) but think hard before you use it.
On the pro side crowdfunds can raise your profile and get a project off the ground without all the scratching around for money from an unsympathetic bank. It can also drive development of new technologies and innovative productions. The Pebble watch is a good example of something initially funded through crowd sourced finance. Microfunding can also point to a potential market for your project because if people will finance the work then, logically speaking at least, even more will buy it. Possibly the most important aspect of crowdfunding is it works ‘outside the box’ potentially facilitating new and less obviously commercially viable ideas.
Beware though as there are cons to be considered. You are basically putting your big idea into the public domain so how do you protect your intellectual rights? What happens to your reputation if you don’t get the money? And you should maybe also ask yourself ‘if my idea is so good, why do I need crowdfunding’?
Something you do need to remember with any crowdfunding project is the financial responsibility. The money still needs to be properly accounted for and you may want to consult us regarding the liability issues involved. Crowdfunding has potential but, as always, make sure you know what the financial implications are.