Crowdfunding: Saviour or scam?
Digital distribution, alpha funding, paywalls; the last few years have seen a glut of new business models encroach on the technology sectors, each claiming to be the future of the market. Some have managed to secure successful footholds, while others have been little more than flash-in-the-pan successes.
Enter crowdfunding; potentially an exciting new way for start-ups to do business, but one that’s still yet to prove it’s more than just a transient trend.
How crowdfunding works is simple: start-ups pitch their ideas online just as they would to investors. Customers pledge money in response and when the company has raised as much money as it needs, the plan moves forward. Crowdfunding pitches are typically hosted on dedicated online platforms, but in theory can be hosted anywhere. What’s crucial is that the money comes from large numbers of potential customers, not from single investors or other companies.
