Funding today is as close as the nearest computer keyboard. Whether raising donations, loans, or even equity financing, crowdfunding is now a feasible choice serving for-profit and not-for-profit companies alike. Additionally, it’s serving individual artists, social entrepreneurs, and other assorted do-gooders along with consumers wanting to borrow money for convincing reasons, often to refinance themselves out of more expensive debt.
Crowdfunding is proving to be huge. “Registration of Internet domain names containing ‘crowdfunding’ already has spiked from 900 to 8,800 in 2012,” according to the North American Securities Administrators Association, an investor protection group.1
According to crowdfunding market analyst Massolutions.com, “Global crowdfunding markets accelerated from an annual growth of 64 percent in 2011 to an 81 percent growth in 2012. We are forecasting $5.1 billion in total global funding volumes in 2013.”2 To put that figure in perspective, 90 percent of U.S. banks have assets less than $1 billion.3
In 2012, the Elevation Dock, an aftermarket smartphone cradle for Apple iPhones, became the first individual crowdfunding campaign to reach the $1 million milestone. A few months later, Pebble Technology reached this milestone in only 28 hours, with the eventual campaign totaling over $10 million in total funds raised.