A Brief History of Crowdfunding
Stemming from the 1700’s with the creation of small loans in Ireland, today’s idea of crowdfunding found its humble beginnings in one singular British band in 1997. This band wanted to go on one final tour, and so, they turned to the internet for help. With the support of their loyal following, they were able to fund their tour with micro-donations given by their fans. Out of this successful internet phenomenon was birthed ArtistShare–the first online crowdfunding source in existence.
Over the next nine years, crowdfunding slowly began to find authority amongst like minded individuals online. With the advent of, “rewards-based,… debt-based,… donation-based,” and, “equity”-based crowdfunding over those nine years, crowdfunding eventually exploded with popularity in 2009. With the presence of highly-reputable early adopters, such as the founding of Indiegogo in 2008, crowdfunding caught on like a wildfire, leading to the creation of Kickstarter, Indiegogo’s primary competitor. These, “rewards-based crowdfunding platforms,” became the latest craze in philanthropy. Just to reinforce how much crowdfunding took the economy by storm, the industry went from a measly net worth of $530,000,000 to $1,500,000,000 in the two years between 2009–2011. And, it’s not going to stop there, sources say. Growth in this sector is projected to grow by 74% annually.
The White House Takes Notice
From 2009 to 2012, crowdfunding gained a rapidly growing audience that even took the White House by storm. Furthermore, Fundable says that on April 5, 2012, “President Barack Obama signed the Jumpstart Our Business Startups (JOBS) Act into law. Also known as ‘the crowdfunding bill,’ the JOBS Act aims to lessen regulation burdens on small businesses and has legalized equity crowdfunding. This includes removing the ban on general solicitation that prevents entrepreneurs from publicizing that they’re raising money.” Because the dawn of the JOBS Act set in on America, entrepreneurs Eric Corl and Wil Schroter created Fundable, the first capital-raising crowdfunding source online.
Take a look at Fundable’s insightful infographic with a timeline of the aforementioned events.
Crowdfunding has supported millions of organizations, companies, and individuals with hundreds of millions of dollars over the course of its young existence. With the exponential growth of technology, particularly computers, since the early 1980’s, people around the globe have been able to not only retrieve whatever information they desire with a simple click, but also access like minded groups and individuals worldwide. This type of remote-access has given people the opportunity to hyper-specialize their philanthropic efforts, supporting niche causes with a strategic and minimalistic hand.
Originally published at alexandergladney.org.