Monday, 12 february 2018 | Redacción CEU
Funding is that obstacle which the entrepreneur usually stumbles with, when trying to start a project. The crisis has not contributed to make this hurdle easier to overcome, but it has helped new ideas to be put into practice. For some years, a new "crowd" current based on the benefits of collective actions aims to offer a solution to this and other problems. Crowdfunding now stands as the new financing hero. Not only it offers an alternative to traditional channels, it also becomes a new tool in the financial sector that opens a new range of possibilities. What does it consist on? What are the different types of collective funding? How has this "crowd" phenomenon transformed the financial scenario?
Sharing economy, economy on demand, gig economy, economy of platforms, circular economy,... There are many names to call it, although each concept has its own particularities. It is a new movement based on the power of the coordination between different people on a massive scale. A trend that is changing the rules of the game, in large part, thanks to the unstoppable development of digital technology. Its promoters can reach specific goals without more intermediaries than the platforms –and their administrators–. Something that might have been difficult otherwise, and in some cases even impossible. The phenomenon "crowd" sets out new challenges, also new alternatives.
With the little help of a crowd
Crowdsourcing, crowdthinking, crowdworking, crowdcreating, crowdbuying,... All of them are terms that designate new practices within the framework of this collaborative germ, known as the "crowd" world. A space that offers new channels in traditional sectors and that as the time goes by, grows and settles in our society. The finance sector, increasingly affected by the digital technology development and the FINTECHs arrival, is also influenced by this culture of the crowd and, in a very particular way, by the crowdfunding.
In 1997, the British rock band Marillion made a pioneering action in the world, raising 60,000 dollars –destined to cover the costs of their tour in the US– through an action on the Net. The band asked their fans if they would be willing to help fund their tour in North America and, against all odds, the response was positive. This initiative would be remembered as the first crowdfunding in history. Centuries earlier, other experiences had showed the potential of this type of proposals on the funding of projects. Mozart and Beethoven offered manuscripts or pieces of their works to those small patrons who helped them financing their concerts and compositions. The own Statue of Liberty was able to rise thanks to the initiative from the publisher Joseph Pulitzer offering to write the readers' name who donated money for the pedestal construction in his newspaper and giving them replicas of the statue in miniature.