Crowdfunding platforms raised $2.7 billion globally in 2012

By on April 9, 2013, 12:30 PM

Crowdfunding campaigns are most often associated with nifty electronic gadgets but in reality, that’s only part of the equation that led to an 81 percent increase in money raised during 2012. Collectively, these platforms managed to generate $2.7 billion and fund more than 1 million campaigns last year according to a recent report from Massolution.

Crowdfunding includes donation, reward, lending, equity and royalty models according to the research firm. On an individual scale, 27.4 percent of funds were donated for social causes, 16.9 percent went toward business and entrepreneurship while films and performing arts were responsible for 11.9 percent of the overall revenue pool.

Interestingly enough, more than half of all the money raised came through US-based websites. That’s because crowdfunding exploded after President Barack Obama signed the Jumpstart our Business Startups (JOBS) act last year. The law won’t go into effect until later this year but that hasn’t stopped multiple startups from preparing to launch in the meantime. Collectively, the US and Europe accounted for 95 percent of the crowdfunding market.

Growth isn’t expected to slow down anytime soon, either. Massolution predicts that global crowdfunding will exceed $5 billion this year. The forecast is based on the fact that regulatory bodies are continuing to pave the way, making it easier and legal for more countries to get in on the action. They believe that the focus will shift away from social causes, however, as funding new businesses and small firms will generate the most money.




User Comments: 5

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cliffordcooley cliffordcooley, TechSpot Paladin, said:

They believe that the focus will shift away from social causes, however, as funding new businesses and small firms will generate the most money.
Geez what a no-brainer, when has anything popular ever stayed social? Business has always destroyed anything social, once it gained popularity.

MilwaukeeMike said:

They believe that the focus will shift away from social causes, however, as funding new businesses and small firms will generate the most money.
Geez what a no-brainer, when has anything popular ever stayed social? Business has always destroyed anything social, once it gained popularity.

I think you misunderstood that line (or maybe I do). The focus will shift away from social causes because they don't make any money. Social, meaning things like facebook, which as you know, has had a lot of trouble making money even though it's got like a billion users. We are used to social tools being free.

Business uses have a much better chance of making money. A store or website that sells something will usually make more money than a website that needs to sell advertising.

Both have to make money or they won't survive. The goal of a business is to make money, and the goal of a social cause is to get people to interact. You can see why businesses are more attractive to investors.

cliffordcooley cliffordcooley, TechSpot Paladin, said:

I think you misunderstood that line (or maybe I do).
Your probably right, after reading your explanation it kinda makes more sense.

avioza said:

I thought he wass referring to the Idea that crowd funding currently represents people investing money in causes they care about for philanthropic reasons, or at least investing in product development they would like to see realized even though they dont make money from their investment.

But with that much money changing hands, it is likely to be used for mercantile purposes in the future, potentially polluting the current ideals that drive crowd funding?

I dont see anything wrong with that, but the incentives for investing would have to be improved to shares of a company or something like a typical venture capitalist would be interested in.

I invested in a space simulator game because lack of mainstream intrests prevent game makers/publishers from creating it, as they will not make boatloads of money. I just wanted the game to be made...

MilwaukeeMike said:

I thought he wass referring to the Idea that crowd funding currently represents people investing money in causes they care about for philanthropic reasons, or at least investing in product development they would like to see realized even though they dont make money from their investment.

Well... not to be picky, but investing means you're expecting a profit (more money back than you put in). You invest in a house because you can make money when you sell it. You 'buy' a car because you're going to get use out of it, but it's going to be worth less when you're done. (Even if the salesman does call it 'investing'

If you're sending money to someone for philanthropic reasons then I would call it 'donating.'

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