The crowdfunding model of modern investing

Idea-project-implementation – does this sound perfect?

Ever wanted to bake a pie in the shape of the number π? Or find the perfect pillow to sleep in the office? It may sound funny to you, but the fact that Pie Pi Pans (π pie molds) have raised over $ 17,000 and the Ostrich Pillow (ostrich pillow) over $ 195,000 through crowdfunding suggests that success is actually close at hand. It can snooze in some forgotten part of the brain in the form of an idea which you simply cannot, or do not want to release out in the open. Maybe you have a great project, you want to start your own start-up company and you need the funds for it, or you are looking for innovative solutions to problems that are troubling you and you are ready to invest in their development.

If any of the above examples has captured your interest, it is time to get acquainted with crowdfunding. Although it seems to be a term of the 21stcentury, crowdfunding has emerged far before modern technology. For example, the first campaign of that kind in the United States was recorded in 1885 when, at the urging of Joseph Pulitzer in The New York World newspaper, he financed the construction of a pedestal and the erection of the Statue of Liberty.

Crowdfunding, or microfinancing, is based on the presentation of a project to a large number of investors or donors potentially involved in its financing. According to the type of incentives or rewards for the persons who fund the project or according to the expectations that investors have from the project, investors participate in the profits generated.

Today, there are platforms that allow us to come up with ideas through which it is possible to seek investors and money and create new values. Investors are allowed to participate in equity to more easily secure a sufficient amount of investment and thus raise the project to a new level. Investment risk is dispersed between a large number of investors, so no one is exposed to significant consequences. When implementing a project through crowdfunding, the presentation of the project, i.e. introducing it to the wider community is  extremely important. If there is a fixed goal, the investor’s trust in the project is higher and therefore more likely to reach the goal. The number of crowdfunding platforms is increasing, and the number of investments per equity model is a way of maintaining economic competitiveness. Crowdfunding is one of the drivers of the global economic recovery.