With the anticipation of equity crowdfunding and growth of perk-based crowdfunding, in general, the number of registered websites containing the word “crowdfund” has increased by a tenfold, reaching over 9,000. Campaigns on crowdfunding sites, ranging from video games to dance, have been able to raise hundreds of thousands of dollars. These sites give individuals the opportunity to not only raise needed funds for their ventures, but also help them connect and engage their network.
The growth of crowdfunding is not limited to the United States–it is an international phenomenon. All around the world, crowdfunding platforms have multiplied–serving almost every niche possible. Platforms worldwide have raised $1.5 billion to fund millions of projects.
Close to home, in Canada, there are now 17 perk-based crowdfunding platforms. The popular platforms include IdeaVibes, SoKap, FundRazr, and Small Change Fund. In order to voice the opinions of citizens and small businesses on crowdfunding, the National Crowdfunding Association of Canada was created. Many in the country believe that the passage of equity crowdfunding will support startups and help lead to job growth. The problem, however, is that there is no central regulator in Canada. In order for equity crowdfunding to pass, lobbyists must seek rule change in each of the country’s 13 provinces and territories.
In Latin America, crowdfunding has become a phenomenon, harnessing the youth’s energy. Last August, Idea.me, based in Buenos Aires, acquired Movere, Brazil’s second largest crowdfunding site. This acquisition allowed Idea.me to enter the Brazilian market with a local presence and expand more rapidly. The site is now Latin America’s largest crowdfunding platform with a presence in Argentina, Chile, Mexico, Colombia, and Brazil. As of August, Idea.me and Movere had nearly 500 thousand fully pledged projects. Crowdfunding, in large part, has become popular in Latin America because it eliminates financing barriers that many young entrepreneurs face. These barriers arise from the constant uncertainty created by economic and political circumstances in the region.
In Australia and New Zealand, there are nearly 10 major crowdfunding sites supporting creative, community, charitable, social impact, music, and sporting campaigns. These sites include Pozible, iPledg, StartSomeGood, PledgeMe, and Give a Little. Most successful campaigns have been creative projects–music, dance, and theatre. The use of crowdfunding, however, has expanded to small businesses as well. In Australia, small businesses hope that the government will loosen regulations and allow for equity crowdfunding soon.
In Europe, crowdfunding grew up 300% in 2012. Crowdfunding powerhouses in the United States, namely Kickstarter and Indiegogo, have have either expanded or announced that they will expand into European markets. Of the numerous crowdfunding platforms in the region, 15% are dedicated to investment, or equity, crowdfunding. In the United Kingdom, for example, the largest equity based crowdfunding platform, Crowdcube, launched in July 2011 and has thus far raised over £4 million to support early stage companies and small businesses. In order to encourage investment in startups, the Enterprise Investment Scheme in the U.K. gives anyone investing between £500 thousand and £1 million in a qualifying business income tax relief. Regulations supporting and encouraging crowdfunding have helped the industry grow rapidly in the U.K. and other European countries.
Crowdfunding is becoming mainstream worldwide, especially as governments work to loosen regulations. In many countries, crowdfunding provides a space where people, particularly the youth, can participate in collective ideas and unite around cultural and social projects. The growth of the industry seems unlimited, and it will be interesting to see how different regions use crowdfunding platforms in the future to meet their individual and collective needs.