When crowdfunding blazed onto the scene several years ago as a new, democratic method of sourcing funding for businesses and worthwhile projects, it was hailed a credible source of cash for boot-strapped entrepreneurs, desperate to get their ideas into production. Combining the entrepreneur’s immediate need (cash) with the public’s perceived future need (goods), it expertly brought forward the sales in a neat swap of intent and commitment which has seen rise to some of the most successful new companies on the market.
But, somewhere along the way, things have got badly lost in translation. Search for crowdfunding in Google and top of the paid search returns are gofundme and justgiving – both charitable giving sites. A news story doing the rounds this week tells of Saatchi & Saatchi chairman Richard Huntington “crowdfunding” surgery for his dog, Edward Lear despite living in a £1 million house on Primrose Hill in London and earning a six figure annual salary.
The premise of crowdfunding is that the “funder” gets something in return for their investment. It’s usually in the form of a promise of future goods or services or, as in Brew Dog’s Equity for Punks crowdfunding scheme, it’s a piece of the business.
“Crowdfunding” to pay for your dog’s leg operation with Britain’s SuperVet is simply begging others for money, there’s no simpler way to dress it up. Any reasonable person landed with an unexpected bill to pay would borrow the money from close family, or take out a personal loan. For some bizarre reason it has become acceptable to ask perfect strangers on the internet to pay instead, for nothing in return.
With 442 “crowdfunding” campaigns – and I’m using the term loosely – being launched on a daily basis around the globe, you would think it would naturally follow that world economic growth would be soaring (it isn’t) as a result of all these new entrepreneurial ideas getting off the ground. Or charitable giving. That would be going up exponentially, surely? But it isn’t. The Charities Aid Foundation reports little to no growth in charitable donations between 2016 and 2017.
It seems people are simply giving their money away to strangers on the internet, in return for very little except sight of a few Instagram posts of a cute dog (which, arguably, would have been posted anyway).
Maybe it’s time to ask out loud: has crowdfunding got lost in translation?
THE SALES PITCH
If you have a genuine crowdfunding project to promote, get in touch with the team at Volpa. We have experience of working with clients to set achievable crowdfunding targets and successfully manage crowdfunding campaigns to completion. Give us a call on 01738 658187.