What do a chipped tooth, a world record and the relocation of a popular café in downtown Oakland all have in common? Each needed money to achieve a goal and, rather than going the usual routes of taking out loans or operating on credit, each found funding through crowd funding.
At a panel at Social Media Week in San Francisco today, The Next Web's Hermione Way led a discussion on the new, age-old form of financing that's become uniquely possible with the advent of social media.
Attending the panel were Jeffery Self, Tammy Camp and Cortt Dunlap, each with an interesting tale of how they used crowd funding to achieve their goals. Self said he raised $3,400 total in just three days to help pay off an emergency root canal and surgery for a chipped tooth that resulted from a misplaced head-butt. Camp, an entrepreneur and kiteboarder, related her 48 hour funding of a kiteboarding world record in the Dominican Republic. Cortt Dunlap told his tale of how he raised enough money to move his local coffee shop to a new location when circumstances caused the lease to be pulled from beneath it.
How was this all achieved? Each story hinged on the idea that social media made this sort of crowd funding uniquely possible. That, and a site called IndieGoGo.
According to IndieGoGo director of marketing Erica Labovitz, crowdfunding is nothing new, but social media certainly makes a difference.
"Crowd funding is nothing new. What's new about it is that it's happening on line and through social media," said Labovitz. "A fun fact that most people don't know is that the Statue of Liberty was crowd funded. What's different now is that you have access to so many more people than you otherwise would."
Labovitz said that IndieGoGo, which was founded in 2008, has expanded to more than 160 countries worldwide and currently has more than 16,000 campaigns on the site.
While all three panelists offered tales of successful crowd funding, moderator Hermione Way offered that more than 60% of all crowd funding efforts ended unsuccessfully. What, then, had been at the center of their success, she asked? The general consensus, it seemed, was to offer a genuine vision for why such funding was needed and what you planned to do with the money raised. Self said that this video helped with his campaign, while others simply said that it was through existing connections on social media sites that their campaigns really got rolling.
If a chipped tooth, a world record and a relocation are all viable crowd-funded projects, then could we not crowd fund our lives, asked Way? Or how about our start-ups?
"I wouldn't say it cancels out VCs at all," offered Camp. "Maybe it will give you proof of concepts for angel investing. I don't think it will disrupt that industry, but it will give it proof of concept."
We've seen examples of successful startup crowd-funding before. Will this be a new, disruptive force in the tech world? Or will it simply be a new step on the way to economic viability, somewhere between bootstrapping and venture funding?