Evaluating the Successes and Failures of Crowdfunding [INFOGRAPHIC]
Crowdfunding is by definition “the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.” You can crowdfund just about anything, including disaster relief, movies, citizen journalism, startup companies, basic research, and inventions. The world’s largest crowdfunding platform is Kickstarter. The other heavyweight, IndieGoGo, is an international crowdfunding site where anyone can raise money for film, music, art, charity, small business, gaming, theater, and more.
Crowdfunding has seen its fair share of successes and failures. A campaign to fund the development of the Pebble, an e-paper customizable watch that displays the time and phone notifications like texts, reminders, and emails, raised over $10 million, 10,266% more than its developers requested. (The Pebble can also run applications.) A campaign to fund the development of Ouya, an Android-powered video game console, raised over $8.5 million, 905% percent more than requested. (An Ouya owner can also develop games for the system.) An example of “feel good” crowdfunding, one campaign raised over $703,000 to send a 68-year-old bus monitor on her dream vacation after a video of her being harassed by middle schoolers went viral. (The campaign’s target was $5,000.)
There have been cases of alleged crowdfunding scams as well. Seemingly fraudulent campaigns to fund the development of the the game Mythic: The Story of Gods and Men and to produce beef jerk using Kobe beef were shutdown before any money changed hands. Meanwhile, funders of Eyez by ZionEyez, a pair of glasses with a built-in mic and camera and streaming capabilities, have nothing to show for the over $300,000 they invested over three years ago. This pair of glasses was too ambitious. Backers have received no rewards, glasses or reimbursed funds for their contributions.
In short, the story of crowdfunding is still in its opening chapters. To learn more, check out the infographic below!