Sky Black, a surrealist artist from Arizona, wants to paint a mural on the 4,500-square-foot wall of the Orpheum Theater in Flagstaff. Black needs $12,000 to complete phase one of his project. Quinn Callender, a 7-year-old from British Columbia, has a best friend with cerebral palsy who needs surgery. Estimated cost of the surgery is $20,000. How are an artist and a 7-year-old going to fund their dreams? They aren't--but their supporters will.

 

Crowdfunding platforms are giving new life to individuals seeking capital to fund their brilliant (and sometimes not-so-brilliant) ideas. These platforms also supply everyday people the opportunity to monetarily support products and causes they believe in. In the last couple of years, crowdfunding has been generating quite a buzz.  

 

A Rose by Any Other Name

Each crowdfunding site has the same basic principle of providing financial assistance for specific initiatives--but not every site supports the same types of campaigns. Kickstarter is an outlet for individuals to create, showcase, and sell creative projects. IndieGoGo, an international crowdfunding resource, helps users finance ideas, charities, or startups. Compared to Kickstarter, IndieGoGo has more flexible campaign options. Fundable helps small businesses raise capital to continue providing customers products and services.

 

Virtually Unstoppable

One of the most successful crowdfunding campaigns was for the virtual reality headset, Oculus Rift. A developer kit for the headset exceeded its pledge goal of $250,000 by 975% and ended its campaign on Kickstarter with over $2.4 million raised. Contributors paid $10 or more to receive gifts in return such as t-shirts and posters. Contributors who paid $5,000 or more received swag and a paid trip to the Oculus headquarters.

 

The headset, which is expected to be available to consumers by 2015, was acquired by Facebook for $2 billion earlier this year. Controversy has stemmed from the acquisition of the headset, as early supporters feel it is their right to benefit monetarily from being among the first to fund the project. Unfortunately for those supporters, Kickstarter is not an equity-based crowdfunding site, so contributions to campaigns are considered donations, not investments. In 2012, Congress passed the Jumpstart Our Business Startups (JOBS) Act. The third title of the act focuses on crowdfunding, and will allow the sites to offer unaccredited investors the ability to purchase small stakes in crowdfunding projects. This title is expected to come into effect in late 2014.

 

Sometimes crowdfunding campaigns start as a joke, but get serious quickly. Zack Brown from Columbus, Ohio created a Kickstarter campaign to raise $10 to make a potato salad--as of today, more than 6,300 backers have contributed over $50,000. With the money, Brown will be renting a party hall and inviting the Internet to his potato salad party.

 

While not every crowdfunding campaign is financing a "good" cause, the majority of campaigns allow pledgers and entrepreneurs alike to make a difference, and that's buzzworthy to us at Monogram.

 

 

Sincerely, 

 

Mona Graham
 
Monogram Communication Services

798 University Avenue

  

  

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