Crowdfunding projects are collective financing of something. Due to the development of Internet technologies, 90% of it is connected with the work of specialized sites. Each of them has its own characteristics and its own rules.
What is crowdfunding, crowdinvesting, people's investment
The term "crowdfunding" has long ceased to be new among businessmen and members of the public in Russia. The only difficulty is understanding its varieties and features of various platforms.
In general, this is search for funds for the opening or development of some projects. They can be exclusively social, designed to make people's lives better, but not related to commerce, plans. There may also be commercial enterprises.
Accordingly, all those who finance some startups can be divided into sponsors and investors. Sponsors most often expect from their investments some kind of return that has no direct connection with money. This can be explicit or image advertising, improving the positioning of the brand in the market, increasing the loyalty of the target audience.
True, there are also people who give small amounts just like that and do not even expect words of gratitude in return. Thus, they can solve some psychological problems, for example, increase self-esteem. Someone makes a shelter for stray animals, turns to the people for help, and the donor improves his karma in the literal sense.
The picture changes if the terms of the money provide imply that if the project is successful, the person who contributed will benefit in the form of a one-time payment or will receive it constantly. Then crowdinvesting gets closer to microinvestment or microcredit.
With the help of such a system, an aspiring musician can raise money for the creation of the first album, a writer - the publication of a book, and a person who dreams of becoming a farmer can receive investments that will solve the problem of renting premises or land plot. In the same way, someone tries to solve social problems.
In Russia today
Oddly enough, but in 2016, market volumes did not decrease due to the crisis, but grew. It is possible that also because of the crisis.
Thus, analysts of the Yandex.Money service claim that for 11 months of 2016, the volume of transfers of the e-currency of this service increased by 70% compared to the same period in 2015. The number of people who began to transfer money also increased. And not by some small percentage, but by a factor of two. In total, from January to the end of November, 290 million rubles were transferred.
The transfers that were made using the yasobe.ru and Yandex.Checkout tools were analyzed.
The increase in the volume of transfers and the average check is also confirmed by the employees of the Planeta.ru and Boomstarter.ru projects. These are the largest Russian platforms for crowdfunding. At the same time, it is noted that growth was noticed both in the commercial niche and in the niche of charity. Someone transferred 250 thousand rubles for charitable purposes in 2016 for one transfer.
The growth is due to the fact that the famous people, which, with the help of crowdfunding, solve two problems at once.
- First, they start advertising campaigns for their products even before they appear. If a famous singer or a writer reaching out to his audience for support, that is the best announcement.
- Secondly, when a company is involved in a project as a financier, sponsor or investor, it also immediately gains popularity.
How to invest in startups and crowdfunding projects
First of all, about how projects are created. Let's take a look at the example of a service. planeta.ru and the case of the abstract creative personality.
Let it be the poet Ivan Kukushkin. During his activity, he has already managed to please people and has his own pages on popular services of network samizdat and on social networks. The time has come to enter paper literature, but the poet does not have the money to publish at his own expense.
He enters the service, registers the project, describes it, selects the appropriate category and starts. The amount he needs is not so difficult to establish. She will be told in any publishing house, where he will apply. It depends on the circulation, type of edition, availability preliminary agreements with distributors and a number of other factors. Let it be only 100 thousand rubles. The poet indicates the period for which he intends to collect the amount and proceeds to the stage of concluding an agreement. If within the specified period it is not possible to collect even 50% of the right money, then the transfers will be returned to those who made donations. If it turns out a little more, then the service fee for the collection will be 15%. If the entire amount is collected, the service will take 10%.
To promote the project, you can use promotional materials and conduct various promotions. Suppose that our Kukushkin had many subscribers and fans. If everyone gives at least 100 rubles, then only a thousand transfers are enough.
In the same place - in the publishing house, the writer will also be told about what commercial benefits a book can give. Depending on the conditions of the project, people transferring money can either amuse their vanity or replenish their pockets at the expense of Ivan Kukushkin's creativity.
How does this happen? Each user can purchase an investment share of a specific project. At this moment, the investor and author of the project enter into legal relations. An investment agreement is formed, which defines the rights and obligations of the parties. Prior to this, it is recommended to familiarize yourself with the public offer agreement. But the most important will be the contract itself between the participants in the system.
The investor acts at his own risk. Basically, it is due to the fact that the author of the project simply will not be able to implement it. For example, our poet will write too bad poetry that no publishing house will accept, even for publication at his expense. In this case, the investor will simply lose his money. The possibility of perspective analysis by experts is provided, and all participants can express their opinion about the project.
All this is valid if the project is commercial. For example, a poet from our project may declare that he will transfer all the profit from the publication to charitable foundations. Then it will not be about investing in a project, but about financial assistance to a charity event.
Successful crowdfunding projects
Examples of success can be found in almost every target area. Service planeta.ru tells about the authors who were able to collect more than a million. These are Evgeny Feldman with his photo book about the Maidan in Ukraine, the Aquarium group and Boris Grebenshchikov, who collect all the new songs in bulk for the publication, Viktor Shenderovich, who needed money for a book about brain blockade, and many other famous personalities.
It immediately becomes clear that for such camps you need to be a Grishkovets or launch a project like “Wet Nose”, which threatens to create a unique center for helping a variety of animals. Beginners can hardly claim such large sums. Nevertheless, the authors of the forum for modern mothers managed to collect more than 100 thousand, although the topic can hardly be considered unique. Why what, but there are plenty of women's sites on the Internet. It's all about how the promotion strategy is built.
Venues
They all share in this way.
- You can’t monetize anything at all, you can only get sponsorship in the development of some social project or help in the form of charity.
- You can monetize products of creative activity, or some sports or educational projects.
- You can monetize any commercial project.
One of the market leaders, already mentioned service planeta.ru, belongs to the intermediate category. We all know that Boris Grebenshchikov or Bi-2 do not distribute their products for free. They receive income and investors will be able to hope for deductions on their shares.
But not everyone who works on a reimbursable basis will be able to organize a project. So, our poet Kukushkin can collect money for the publication of a collection of poems. Maybe even create a project "School of a novice poet." But a bookstore is not suitable, because this is direct commerce according to the “buy low, sell high” scheme. Projects are moderated, and each author gets his own personal curator.
Boomstarter- even more creativity, even less commerce. Charity applications are not considered. Even the school of beginning poets is doubtful. Here the poet Kukushkin will be able to collect money for the publication of the book, but only for 60 days.
"Circles", "Thank you"- platforms with great story, but there is little crowdfunding in them. These are a kind of means that are designed to refute the phrase "everyone can offend an artist, but ...". With their help, fans can give donations to their idols - both experienced and beginners.
"Rusini"- There is more business here. Socially oriented business, work of NGOs, creative projects are financed. But the approach is always individual. The author can be convinced of his creativity, and the administration simply will not let him publish the project.
"With the world on a string" - the concept is about the same as that of Rusini, but here it is also possible to finance joint social purchases.
More serious
A feature of domestic crowdfunding is narrowness of the funding niche. This is the work of artists, writers, artists. There are very few cases when it was possible to raise funds for something necessary. They say that in some city, citizens raised 300 thousand rubles for the construction of a bridge, and are currently collecting money to install a traffic light at the intersection, where many people died in an accident. However, the total volume of such investments is extremely small. There is a section of technologies on the site "With the world in a thread", but there are only 10 projects that are related to the development of something that people do not really need.
It is possible that these are just factors. initial stage development. In the meantime, people donate money mainly to the development of their idols, as well as children's libraries and animal shelters.
More serious things are yet to come!
video consultation
Evgeny Gavrilin, co-founder of the crowdfunding platform Boomstarter, talks about crowdfunding.
Today we'll talk about what is crowdfunding how and to whom it can be useful, let's look at some illustrative world examples of crowdfunding and dwell a little on how crowdfunding is developing in Russia, Ukraine and other post-Soviet countries. I recommend that you do not skip this article, but be sure to read it, because now this phenomenon is quite common, and you need to know well what it is in order not to become a victim of scammers.
What is crowdfunding?
So what is crowdfunding? The term itself is borrowed from in English(crowdfunding), and literally means “crowd funding”. More literally, crowdfunding can be translated as “public funding”.
- this is the attraction of funds to finance a project (both commercial and not) from anyone. People who raise funds to finance a project through crowdfunding are called recipients, and people who donate funds are called donors.
To date, crowdfunding on the Internet has become the most widespread: it uses both social networks and other popular web resources, as well as specialized sites dedicated to just this - crowdfunding platforms.
Most often, crowdfunding raises funds for the following purposes:
- Operations and treatment;
- Rendering to individuals or groups of people;
- Volunteer help;
- Financial support for athletes, musicians, cultural and art workers;
- Financing of political campaigns and projects;
- Improvement of certain territories;
- Financing, attraction of investments in business.
The latter option, as a rule, involves investing in a project not on a gratuitous basis, but with the expectation of receiving a certain profit. This type of crowdfunding is called crowdinvesting.
Before starting fundraising, the recipient must indicate and justify the amount that must be collected in order for the project to be implemented or put into operation. And as funds are received, he keeps records and reports to donors on how much funds have already been collected and where they have been spent, providing supporting documents.
An important feature of crowdfunding is that each donor is personally imbued with the idea of the project, believes in it, and therefore is ready to invest a certain amount in the project for free or with a desire to make a profit.
To date, the turnover of crowdfunding in the world amounts to tens of billions of dollars a year, despite the fact that the calculations are very approximate, to get more exact result it's quite difficult here.
Crowdfunding examples.
Consider a few famous examples crowdfunding.
Example 1 . Crowdfunding financed the presidential campaign of the incumbent US President Barack Obama in 2008. At that time, more than 2 million citizens of the country made contributions totaling $272 million at the stage of the primaries alone, mostly all of these contributions were small.
Example 2 . In 2012, with the help of crowdfunding, the Russian rock band "Bi-2" raised 1.25 million rubles to record their album "Spirit".
Example 3 . American horror king Stephen King once posted the first chapter of his new book online asking for a $1 donation to read it. In this way, 2 million dollars were collected very quickly.
Example 4 . British film company Spanner Films raised more than £1 million through crowdfunding between 2004 and 2009 documentary film“The Age of Fools”, which was dedicated to the problem of global climate change on the planet. According to the fundraising terms, all project participants are paid royalties (part of the company's income) for 10 years from the moment the film is released.
Example 5 . In 2012, funds were raised through crowdfunding for the creation of the famous video games Adventure and Wasteland 2: more than 87,000 donors took part in the collection, which raised over $3 million for each of the games.
Crowdfunding platforms.
With the development of this method of attracting funding, first in the most developed countries, and then in Russia and the CIS, the so-called crowdfunding platforms began to appear: specialized Internet resources where anyone can register, create their own project and open fundraising for its implementation.
Here is a list of the most popular crowdfunding sites in the world:
- kickstarter.com
- indiegogo.com
- gofundme.com
- 99designs.com
- crowdflower.com
Crowdfunding platforms offer the opportunity to select projects by different criteria: subject, amount of funding, percentage of funds already raised, stage of implementation, etc., which greatly simplifies the work for both the recipient and donors/investors.
Crowdfunding sites act as a kind of guarantor between donors and recipients (all published projects are carefully checked), but they charge a commission for their services, which, as a rule, is 10% of each transfer of funds.
Collecting and donating funds through reputable crowdfunding platforms significantly reduces the risks of fraud, which I will talk about a little later.
Crowdfunding in Russia.
In Russia in last years crowdfunding also began to actively develop, examples of successful implemented projects that were financed in this way.
I bring to your attention a list of popular crowdfunding sites in Russia:
- boomstarter.com
- planeta.ru
- smipon.ru (With the world on a thread)
- thestartman.ru
Of course, Russian crowdfunding in its development is still very far from world analogues, however, it can be stated that it is developing and its turnover is growing.
Crowdfunding and fraud.
Separately, I want to focus on the fact that banal ones are very often disguised as crowdfunding. They distribute fundraising announcements ostensibly at some investment projects, promising its donors an impressive return on their investments, but in fact the collected funds are not invested anywhere, the income of previous investors at the first stages is paid at the expense of subsequent ones, and when the pyramid collects a certain amount of funds, it disappears.
In order not to become a victim of fraudsters, it is necessary to carefully study and analyze the documents provided (even if you just want to provide charitable assistance, for example, to a child for an operation, make sure 100% that your donations will not fall into the pocket of a fraudster: there are a huge number of such cases). Especially if you invest in crowdinvesting with the expectation of making a profit.
Now you have some idea of what crowdfunding is and will be able to make smarter decisions when faced with something like this, and maybe even want to create own project financed through crowdfunding.
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As it develops, the Internet becomes a tool for all more tasks. Let's put it this way: if earlier it was possible to work or have fun on the Internet, today, with the help of the same social resources, you can organize some kind of movement, develop an idea or create a real social "boom", whatever it may be expressed.
One of the best examples of how the Internet can become a powerful platform for social organization people is crowdfunding. This is a relatively new movement that originated in the West just a few years ago. At first it was, of course, just an idea, which gradually grew into an entire industry, the volume of which, according to the results of 2014, is estimated at $ 5.1 billion worldwide. This money finances a huge amount interesting projects, startups, charity events and more.
Crowdfunding in Russia, of course, is a relatively small share of these funds. However, even in our country, platforms are being created that allow centralized collection of money and directing it to certain needs. About what this movement is, what are its advantages and how you can participate - read this article.
What it is?
Let's start with the definition of the term "crowdfunding". This, as you probably already understood, is a word that comes from the English language, formed by the merger of the other two - crowd (in translation - "crowd") and funding ("investment"). Thus, in itself, this word means "mass fundraising from a large number of people."
The phenomenon by which we mean crowdfunding is not something that people have come up with in recent years. Mankind has long known that by gathering efforts (funds) together, it is possible to realize some more global, large-scale goal. In fact, it has been used for centuries.
And the thing is that crowdfunding platforms have recently appeared on the network, which have greatly facilitated this task. Now, in order to announce a fundraiser, you just need to publish a message in social network. And the people who are interested will catch up. So, in principle, fundraising takes place on modern sites. Anyone can donate for anything. There are several models by which crowdfunding sites work.
For example, it can be fundraising as a charitable contribution (for example, for the treatment of a child); as an investment with a subsequent reward (when the person giving money receives a product sample or a souvenir from the company in return). The third model by which money is raised is investing - when people donate funds in return for shares in a startup.
Why is this needed?
The answer to the question of why a crowdfunding project is needed is very simple. The fundraising model puts the main goal, first of all, to accumulate a certain amount. The purpose of such a collection can be anything - to undergo a course of treatment, to assemble a new gadget, to hold an event, to release a music album, and so on. It all depends on who is collecting money, and what this person (group of people) does.
In the future, the funds are directed in the way it was originally stipulated: for example, money from investors goes to a single account of a company conducting crowdfunding (there are several of them in Russia), after which they are sent in a single payment to purchase equipment, rent a studio, and so on. In some cases, money may also be given to the initiators of their collection in order for them to carry out their original task. True, in this case, of course, these finances are carefully monitored.
How and who can use it?
People who could apply for fundraising are usually not selected in any way. The owners of resources that carry out crowdfunding (including Russian sites) accept all applications from anyone who would like to try to raise money and realize their goal. Then they are filtered and carefully selected in order to determine the most worthy project. Of course, each of the platforms has its own set of criteria by which they separate potentially interesting applications from unpromising ones. Then the fundraising process begins. Most often, the initiators of the collection are required to disclose information about themselves and their idea as much as possible, to provide some evidence and facts - all that will convince everyone to make their investment.
Work model
So, to make it a little clearer how everything works, let's show how the crowdfunding project model functions visually. As you may have guessed, everything starts with an idea. It is she who should come to the developer, who immediately lights up with it, thinks over its implementation and submits an application for a fundraising platform.
He does this in accordance with the conditions (rules) of submission. Most often, you need to carefully describe what the essence and novelty of your idea is, to whom it can be useful, how you are going to implement it, and, of course, where and how much money you will spend in order to implement your idea. You publish all this data on the project, after which everyone can familiarize themselves with them and make their contribution.
Next, your campaign begins. The site gives you a certain period during which you must collect a certain amount of money. Let's say that in 30 days your project should collect 100 thousand dollars. In the event that you collect 109 thousand, the organizers give you this amount to achieve your goals. If, for example, your project collects only 73 thousand dollars (does not reach the previously determined amount), it is considered not to have taken place. The money that people allocated is returned to them.
Successful examples in the world
In order to understand how Russian crowdfunding should work in the future, we can look at the most best examples in the world - the most successful sites operating, in particular, in the USA Of course, this is KickStarter. The platform has collected billions of dollars for the implementation of certain products throughout its existence. This is a huge number of startups, some of which have already reached unprecedented heights.
What's great about this venue is the perspectives for each individual participant. Imagine: any inventor, having created a good enough campaign, is able to take his idea into real life and present your product. Firstly, it encourages people to develop, come up with something new and amazing; secondly, projects like KickStarter allow you to create those things that will ultimately change people's lives for the better. These include: innovative gadgets, programs, content and much more - everything that will benefit other people.
Projects in Russia
We have several crowdfunding platforms. Of the most famous, these are: “From the World by a Thread”, “Tugeza”, Planeta.ru, Indiegogo, Kroogi and others. All of them work with projects of different directions, some of them relatively recently (about a year or two). Nevertheless, these sites even managed to show certain results (volumes of funds raised). For example, BoomStarter - 5 million rubles, Planeta.ru - 10 million and so on. In the coming years, as experts predict, we should expect the market to grow by 7-9 times annually. Thus, a real “boom” awaits us in the field of such a phenomenon as crowdfunding. Russian sites Apparently, they are already preparing for this.
How to collect the required amount?
This question worries everyone who raises funds in this way. There are two main factors here - a description of the idea and its PR. To have a really strong, worthwhile project, you need to carefully consider its purpose, form of implementation and technical features representation. As for PR, it depends on how many people will transfer their funds to you. Therefore, it would not hurt you to involve local (and not only) media in advertising your campaign.
prospects
The possibilities that crowdfunding opens up (this is actually the way to life for your project) for each of us are simply endless. The main thing is to be aware of this and work on your idea, not despairing if nothing works right away. Work - and you will succeed! The experience of a large number of other people proves this.
Crowd... what? For those who meet this term for the first time, we explain: crowdfunding is a way to attract financial resources for the implementation or support of independent projects (literally from English - "public funding"). As a phenomenon, “popular fundraising” has existed for a long time, but with the spread of the Internet, it has switched to a completely new level. Crowdfunding gives anyone the opportunity to raise funds to bring their project to life - be it the creation of unique accessories, a non-commercial movie, a new gadget or a social project. All these ideas have one thing in common: they would hardly have been implemented without the help of crowdfunding platforms.
To succeed in crowdfunding, first of all, you need to correctly present yourself and your project. If you want to grab the attention of potential investors but don't know where to start, be sure to read these tips.
1. Make a plan
The structure of the plan will depend entirely on the type of project you have. The plan should include not only a campaign to raise funds, but also the implementation of the project itself.
Experienced crowdfunders start raising funds only at the second or third stage of the work, as most sponsors prefer to invest in an existing project. Set realistic goals and deadlines and be sure to include them in your project description. As a rule, people part with money more easily when they know the time frame in which they will see the result.
2. Be Persuasive
It is important to remember that in fact, you are asking for absolutely strangers open wallets and give you your money. You should stock up on a couple of powerful arguments that will help convince a potential sponsor of the benefits of your project. First of all, the description of your project should convey its significance, the uniqueness of the idea and the value of the product that will result.
Be sure to use visual materials if you have them (and if you don’t, be sure to take care of it!). Show examples of completed projects, demonstrate the completed stages of ongoing work, record a video message to potential investors - anything that convinces people to click on the “Help” button will come in handy.
4. Offer something in return
Many successful campaigns promise their investors something in return for their investment. For example, you can give everyone who donates a certain amount a copy of your movie, a T-shirt with your logo, tickets to your performance, or a handmade product. In order to motivate people to leave large donations, you can come up with a stepwise reward system: the larger the amount, the larger the gift.
5. Find promoters
Tell about your campaign a large number people is the most difficult task you will face in crowdfunding. Ideally, promoters should be people who themselves have invested in your project and are counting on its success. It is also desirable to involve friends and relatives: together you can talk about the project in social networks ( helpful tips to promote the project in social networks you will find). If your project is really unique, get media attention on it - not an easy task, but worth it.
6. Learn from the best
Success stories lot. It is interesting that in Russia the most successful projects are related to creativity and charity (films, games, books, social projects), while technology startups are no less popular abroad. We have selected a few crowdfunding campaigns that may inspire you to succeed.
The meaning of the hard-to-pronounce word “crowdfunding” is explained very easily and simply. Crowdfunding? this is an action to raise money for the implementation of any idea, business, project, creation of an invention.
Usually such actions take place via the Internet. Anyone who wants to can take part and contribute any amount to the announced project. Why is this type of activity so popular now, and who has already excelled in it?
The meaning and meaning of crowdfunding
Translation from English of the first part of the word "crowd" means literally "crowd", and "funding"? financing.
That is, everyone on a voluntary basis contributes to the financing of any project. Does the idea work according to the principle? with the world on a string, naked? shirt.
The author of an idea, or someone who wants to bring it to life, posts information about their offspring on the Internet, which includes goals, deadlines for implementation, and announces the amount needed to collect. The details of the account where you need to transfer money are published.
Sponsors, or as they are called, backers, who invested their money, often receive a reward, for example, a copy of brought to life. But most often, crowdfunding occurs on a gratuitous basis.
How did crowdfunding originate?
The crowdfunding movement began about two decades ago. In 1997, admirers of the famous rock band Marillion organized an Internet event to organize the band's all-American tour. Later, inspired by the success of the idea, the group initiated a fundraiser to record several more albums.
Representatives of the media and the film industry later mastered the same method of raising funds.
Successful examples of crowdfunding
In 2002, Eric Bauman launched the Internet project FilmVenture.com, which was implemented based on the idea of crowdfunding. People who were involved in raising funds for additional filming of the film "Waiting for a Miracle" were promised participation in the filming process and a bonus in the form of DVD versions of the film, issued before their official release. The required amount was collected in three weeks. The amount of the bonus varied depending on the amount donated.
The project of the cartoon "Masyanya", beloved by Russians? one of the most famous and successful projects created with funds raised through crowdfunding. The planeta.ru website announced the company's conditions for collecting the required amount of 100,000 rubles.
Those who donated 100 rubles received a link to a video with a cartoon. Invested 500 rubles? autographed portrait of Masyanya. Those beckers who were generous with 5,000 rubles were mentioned in the credits. Portrait of the sponsor or his loved one, drawn by Oleg Kuvaev, was promised to those who would lay out 20 thousand rubles. For a donation of 50 thousand rubles, a unique watercolor from the artist was presented as a gift.
The results of such an action were unexpected: the fundraising was completed in 8 hours. But the money continued to come in, and all the money collected during the month was spent on the release of the next series of Masyanya.
Crowdfunding is used not only for cultural and social projects. Political goals are also successfully financed with funds raised little by little by ordinary people.
For example, Barack Obama was able to raise $272 million through the Internet on primaries 2008.
Alexei Navalny also chose the crowdfunding method to raise funds for events around. His scandalous project "RosPil" for several years was able to collect no less than 10 million rubles.
Where to post your offer to raise funds?
For those who want to take advantage of the crowdfunding opportunity, there are several portals on the Internet where you can post your idea and announce a fundraiser for it.
The most famous fundraising project in the US is Kickstarter.
There are no Russian analogues of portals of this scale yet, but there are similar projects with similar goals: Planeta.ru, Boomstarter and Kroogi.
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