Crowdfunding is an online platform wherein the crowd provides a fund to support a project or cause. It has already begun to find its place in different countries. It is mostly used for funding businesses, dream projects, donations, and investments – thus resulting it to have many types.
In addition to crowdfunding having a little yet growing base in the Philippines, donations, and fundraising events are essential when it comes to collecting money for victims of calamities. The Philippines is located in the ring of fire, thus being susceptible to typhoons and earthquakes. About donations and disasters, crowdfunding has a type called donation-based crowdfunding. Crowdfunding has different types. Learn it here.
Crowdfunding is a new term, but the idea of this word has been practiced in the past. Crowdfunding is a fundraising concept that involves the project owner and the backers online according to Berkeley (2015). It is different from the traditional way of funding as mentioned by Bannerman (2013) since the project owners are the ones who seek for funds through a website, while backers, the group people who pledged financial support to the project owner in exchange for a reward, Vergara (2015).
Crowdfunding is a new form or method of raising funds; it has already achieved widespread popularity and attention in recent years. However, from the collated literature of Lei’s (2015) study, activities of investment in crowdfunding are mostly based on the behavior of herding or gathering. Hazen’s (2012) article discussed the proposals and legislation of crowdfunding, but it led him to conclude that crowdfunding is one condition on meaningful and information-based disclosures. He then added that social networking sites are the primary factors that connect different people to crowdfunding projects, events, ideas, and causes.
In 1997, Marillion – a British rock band, had a tour in the United States which was funded online by their fans from US. In short, they pioneered crowdfunding. But at that time, the term crowdfunding was not yet used.
According to a study done by David Freedman and Matthew Nutting, in 2003, Brian Camelio launched a website called ArtistShare. It is a place where musicians ask people to help them fund their project so that they can produce it, and it was the first crowdfunding website known in the internet.
It was only on August 12, 2006 where the word crowdfunding was first used. Michael Sullivan, the founder of Fundavlog, first mentioned this word online.
Few years after that, crowdfunding sites such as IndieGoGo and KickStarter started to emerge. From then on more crowdfunding sites started to surface the internet. These sites are mostly used for funding businesses, dream projects, donations, and investments.