While crowdsourcing is mainly focused on the knowledge and preferences of consumer (as input for innovation for example), crowdfunding is about the financing of projects and people by (large) crowds. Prime examples of crowdfunding are:
* Act Blue: Has gathered $22,863,961 for the Democrats since 2004.
* Prosper.Com: “Where people come together to borrow and loan money”.
* Zopa: “The first lending and borrowing exchange”.
* Kiva: “Loans that change lives”. A crowdfunded micro credit initiative.
* Grameen: “Banking for the poor”. Another crowdfunded micro credit initiative.
* Ringside Startup: A failed initiative, that has reincarnated to WeBothLike.
* First Giving: “Online fundraising for everybody”.
* Chipin.com: “The easy way to collect money” .
* Swarm of Angels: “Remixing cinema”. Create a million pound movie.
* Sellaband.Com: “Your Music, Your Choice”. Crowds have funded the recording of six albums so far.
* MyFootballClub: crowdbuying a soccer team.
What’s the relevance to managers and entrepreneurs? Mainly the crowdfunding of projects might open up new opportunities. As a company you can communicate more directly to your investors and circumvent the middlemen, i.e. the stock exchange, especially for specific projects. You can also liquidize more abstract objects (such as bands: Sellaband). Especially for entrepreneurs, opportunities arise. On MyFootballClub 50,000 subscribers will each pay £35 for the purchase of a soccer team, receiving an equal share and voting rights in the newly purchased club afterwards. Smart entrepreneurs could copy this business model to other projects and industries.To Learn More Click Here
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