Source: http://timesofindia.indiatimes.com/tech/tech-news/How-crowdfunding-can-help-you-fulfil-your-dreams/articleshow/45322713.cms
Once upon a time, dads were large hearted. They would merrily invest in their children's dream projects, without any fear of losing out on the money. It didn't really matter if the venture bombed or flourished.
Sadly, times have changed. Dads have become smarter (cautious would be a better word) these days; they will not invest a penny without scrutinizing the idea left, right and centre. Blame it on the recession! Why just dads, everyone is judicious about investments nowadays. To fund a project is tougher than belling a cat, though not completely impossible. Here's an alternative that will fuel all your dreams... sane ones only.
Crowdfunding
That's where all the money lies. In short, it entails the art of raising small funds (mostly a few lakhs) over a small period of time (30 days or so) from multiple investors. If you want to cut an album, launch a neighbourhood radio station or make a film, instead of begging, borrowing or stealing, visit a crowdfunding website (Catapooolt, Wishberry, Milaap and Igniteanintent etc), showcase your project and let the money flow in.
The best part is, the commercial viability isn't very crucial, the idea is. People have got their racing viability isn't very crucial, the idea is. People have got their racing cars, political campaigns, Instagram photo printing platforms, books and disaster relief initiatives financed through crowdfunding.
Anshulika Dubey, co-founder of Wishberry.in, says, "It's very important that the project is pitched well. If not, people won't pay. With a success rate of 60%, we have raised Rs 3 crore for 600 projects from 8,000 funders globally!"
The investors
Broadly, there are three categories of crowdfunding. The biggest chunk is of rewards-based funding, where contributors get tangible or experiential rewards from the projects. No other financial returns are involved.
Then there is peer-to-peer lending, wherein contributors loan to a cause and get their money back with some interest. Lastly, there is equity-based funding, where investors actually come in and get equity in the startups/projects they put their money on.
In the beginning, there may be very little or nothing for the investor. At the most, a thank you note, a mention on the crowdsourcing platform, a free pass to the premiere of the movie or a few prints at discounted rates from the photo printing platform. The contributors don't really expect anything in return because people invest in ideas they believe in, or it's friends or relatives who raise funds.
Satish Kataria, founder of Catapooolt, says, "Thirty per cent of people crowdfund projects of someone they already know or "trust (person cause) and another 20-25% lend money because the completion of the project is a sort of fulfillment of their own dreams."
The Securities and Exchange Board of India (Sebi) has recently proposed a crowdfunding framework for India in a consultation paper recently. "Right now, 50% of the market share belongs to rewards-based crowdfunding but if Sebi's guidelines come into force, it will majorly based funds," adds Dubey.
Facebook friends can pay too
You can ask for crowdfunding even if you do not know how much money you need for an ongoing project.
Delhi-based filmmaker Pawan KY Shrivastava crowdfunded his film Naya Pata through his Facebook page. "I sent emails to my 500 contacts, with a synopsis of the film and asked them to contribute anywhere between Rs 5,000 and Rs 35,000. I raised close to Rs 8 lakh from 350 people!"
A bigger success story is that of 29-year-old IAS officer Armstrong Pame, who built a 100-km motorable road in 2013 to connect a remotely located n village, Tousem, with the rest of Manipur and with neighbouring states Assam and Nagaland. The entire money (Rs 40 lakh) for this road, popularly known as People's Road, was raised online.
The catch
Time consuming. Needs intense planning in limited amount of time. Before you approach a platform on which your a project will be published, you must have something substantial to prove your commitment. The websites first run a background check and scrutinize the idea. As an investor, you need to evaluate the progress a client has already done towards the goal. So, if it's a charger he has built, a prototype has to be shown.
Crowdfunding time machine
The Statue of a Liberty was crowdfunded by the French and Americans. Those who contributed got a model of the statue.
Shyam Benegal's Manthan (1978) was one of the world's first crowdfunded movies, for which more than 5,00,000 members of the Gujarat Milk Cooperatives gave Rs 2 per head.
The modern crowdfunding phenomenon started in 1997, when a British rock band Marillion crowdfunded their reunion tour to the US online.
Writer-director Mark Tapio Kines's feature film Foreign Correspondents released in 1999 was crowdfunded for $1,25,000 by 25 online donors.
ArtistShare became the first dedicated crowdfunding platform in 2003.
Once upon a time, dads were large hearted. They would merrily invest in their children's dream projects, without any fear of losing out on the money. It didn't really matter if the venture bombed or flourished.
Sadly, times have changed. Dads have become smarter (cautious would be a better word) these days; they will not invest a penny without scrutinizing the idea left, right and centre. Blame it on the recession! Why just dads, everyone is judicious about investments nowadays. To fund a project is tougher than belling a cat, though not completely impossible. Here's an alternative that will fuel all your dreams... sane ones only.
Crowdfunding
That's where all the money lies. In short, it entails the art of raising small funds (mostly a few lakhs) over a small period of time (30 days or so) from multiple investors. If you want to cut an album, launch a neighbourhood radio station or make a film, instead of begging, borrowing or stealing, visit a crowdfunding website (Catapooolt, Wishberry, Milaap and Igniteanintent etc), showcase your project and let the money flow in.
The best part is, the commercial viability isn't very crucial, the idea is. People have got their racing viability isn't very crucial, the idea is. People have got their racing cars, political campaigns, Instagram photo printing platforms, books and disaster relief initiatives financed through crowdfunding.
Anshulika Dubey, co-founder of Wishberry.in, says, "It's very important that the project is pitched well. If not, people won't pay. With a success rate of 60%, we have raised Rs 3 crore for 600 projects from 8,000 funders globally!"
The investors
Broadly, there are three categories of crowdfunding. The biggest chunk is of rewards-based funding, where contributors get tangible or experiential rewards from the projects. No other financial returns are involved.
Then there is peer-to-peer lending, wherein contributors loan to a cause and get their money back with some interest. Lastly, there is equity-based funding, where investors actually come in and get equity in the startups/projects they put their money on.
In the beginning, there may be very little or nothing for the investor. At the most, a thank you note, a mention on the crowdsourcing platform, a free pass to the premiere of the movie or a few prints at discounted rates from the photo printing platform. The contributors don't really expect anything in return because people invest in ideas they believe in, or it's friends or relatives who raise funds.
Satish Kataria, founder of Catapooolt, says, "Thirty per cent of people crowdfund projects of someone they already know or "trust (person cause) and another 20-25% lend money because the completion of the project is a sort of fulfillment of their own dreams."
The Securities and Exchange Board of India (Sebi) has recently proposed a crowdfunding framework for India in a consultation paper recently. "Right now, 50% of the market share belongs to rewards-based crowdfunding but if Sebi's guidelines come into force, it will majorly based funds," adds Dubey.
Facebook friends can pay too
You can ask for crowdfunding even if you do not know how much money you need for an ongoing project.
Delhi-based filmmaker Pawan KY Shrivastava crowdfunded his film Naya Pata through his Facebook page. "I sent emails to my 500 contacts, with a synopsis of the film and asked them to contribute anywhere between Rs 5,000 and Rs 35,000. I raised close to Rs 8 lakh from 350 people!"
A bigger success story is that of 29-year-old IAS officer Armstrong Pame, who built a 100-km motorable road in 2013 to connect a remotely located n village, Tousem, with the rest of Manipur and with neighbouring states Assam and Nagaland. The entire money (Rs 40 lakh) for this road, popularly known as People's Road, was raised online.
The catch
Time consuming. Needs intense planning in limited amount of time. Before you approach a platform on which your a project will be published, you must have something substantial to prove your commitment. The websites first run a background check and scrutinize the idea. As an investor, you need to evaluate the progress a client has already done towards the goal. So, if it's a charger he has built, a prototype has to be shown.
Crowdfunding time machine
The Statue of a Liberty was crowdfunded by the French and Americans. Those who contributed got a model of the statue.
Shyam Benegal's Manthan (1978) was one of the world's first crowdfunded movies, for which more than 5,00,000 members of the Gujarat Milk Cooperatives gave Rs 2 per head.
The modern crowdfunding phenomenon started in 1997, when a British rock band Marillion crowdfunded their reunion tour to the US online.
Writer-director Mark Tapio Kines's feature film Foreign Correspondents released in 1999 was crowdfunded for $1,25,000 by 25 online donors.
ArtistShare became the first dedicated crowdfunding platform in 2003.
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