For a new invention or an interesting idea to become a real product, it needs funding.
A classic solution to the problem: the author of the idea is upholstered by the thresholds of business angels, people investing into projects, and tries to wake an interest in them.
A good outcome: the investor believes that by investing money in the project, he will get a big profit. He gives money. The author of the project gets a budget for implementing his idea.
Bad outcome: no business angel believed in the perspectives and potential of the project, so the idea is buried.
The difficulty is that rich investors need to be found and persuaded to listen out. Hundreds of thousands of useful, and sometimes even genius projects are dusting in oblivion only because their authors are not familiar with investors.
But there is a solution to the problem.
Crowdfunding— democracy in the field of finance
The word “crowdfunding” means “public funding” (from the English crowd – the crowd, funding – funding).
The more users believe in the project, the more money there is to implement the project. It’s hard to believe that the complex problem of financing is so easy to solve. But it turns out that a useful idea may well wake the interest in an audience that rates the idea itself, and not just the possible profit from it.
Are you still convinced that you will not receive money? Then let’s see what kind of ideas crowdfunding has already helped to implement!
6 high-profile crowdfunding results
1 Tourist jacket BauBax
The BauBax Travel Jacket campaign has become one of the most financed in the history of the international crowdsfunding platform Kickstarter. The tourist jacket offered 15 different functions – from pockets for headphones, drinks and documents to an inflatable pillow. The unusual model for its versatility and multifunctionality is even nicknamed as the “Swiss knife in the world of jackets”.
The detailed information about the project provided BauBax with the trust of users.
Detailed reports on each step of creating jackets, all stages of the technological process, demonstrating the advantages of their product in different conditions, hundreds of comments— all this attracted the attention of CNN Money and new investors.The company collected more than nine million dollars from forty-five thousand supporters.Each baker, who spent at least 89 dollars, was able to get a jacket with the delivery to anywhere in the world.
2 The helmet of virtual reality
The ideal helmet of virtual reality— the dream of gamers and the dream of science fiction writers is gradually becoming a reality. Today, helmets are made for smartphones, game consoles and computers. Indubitably, it bears the future, and not only for gaming. After all, the helmet of virtual reality can be used for many purposes: for example, training, simulating medical operations or even simply for comfortable viewing of videos on the Internet.
The history of virtual reality helmet, available to average users, has already started with the Oculus Rift project. The idea that a virtual world can come to every house, captured not only the founders of Palmer Lucky and John Carmack, but also thousands of their bakers at the popular crowdfunding service.
Initially, the authors of the project wanted to collect two hundred and fifty thousand dollars, but the company collected two million dollars. Moreover, Oculus Rift was interested in one of the most influential people in the IT industry Mark Zuckerberg. He already bought the company for $ 2 billion. Should we expect helmets for social networks?
3. Anti-stress cube Fidget Cube
Over the past five years, inventors are not tired of pleasing nervous users with a variety of anti-stress gadgets, of which the popularity is only growing. One of these toys was the Fidget Cube, created by the brothers Matthew and Mark McLachlan.
The invention was their passion since childhood. But what would come of it, they did not know. To test what they are capable of, the guys challenged themselves and went down in history. Fidget Cube— a small cube on the faces of which are located a variety of buttons, switches, wheels and toggle switches. Most of its functions are silent, so anyone can turn the cube in the hands even at the most serious events and conferences.
The need to quickly calm down and to get distract experiences everyone. Especially before an important conversation or performance. So the project of the McLachlan brothers interested about one hundred and fifty thousand bakers and collected more than six million dollars with the originally planned amount of fifteen thousand dollars!
Paradoxically, but fact is: the platform for DAO venture financing has opened thanks to public funding and has become one of the most successful crowd-raising campaigns in history. The initiators of the project wanted not only to create a decentralized platform for collecting venture investments, but also to demonstrate the capabilities of the blockchain technology that underlies it.
Having collected $150 million, the project was implemented in May 2016.
The DAO code is open to any user. Therefore, hackers immediately decided to test the system for strength. On June 20, 2016, they broke the system, which added scandalous popularity to the project.
Multifunctional clothing, hi-tech inventions or an anti-stress cube— the success of these projects shows: investors invest in what they clearly lack in the existing market. But it turned out that “material return” is not the only criterion for the perspectives of the crowdfunding campaign. Here are two examples of the fact that spiritual and cultural values can also be created through public funding.
5. The Nikola Tesla Science Center and Museum
The Tower of Wordcliffe was one of the projects of the legendary scientist Nikola Tesla. The idea of the inventor and thinker was to provide the whole earth with wireless systems. But Tesla lost his investments, the tower was destroyed, and the land was sold to a manufacturing factory.
According to the project, Matthew Inman planned to buy land and rebuild the tower for 1.7 million dollars. With the help of crowdfunding, Inman planned only to collect the initial amount of US$850 000 for the ransom application. But more than 33 thousand bakers collected $1.3 million. Impressive results!
Now the tower of Wordkencliff is already being rebuild, the museum attracts volunteers for help in the reconstruction.
6. Short film „Brutus”
Initially, the director Konstantin Pham launched a crowdfunding campaign to analyze the interest of the audience in the non-profit topic of the Holocaust. The plot of the film is based on the story of the Czech writer Ludwik Ashkenazi about the life of a dog, which at an early age was separated from his loving owner and began to be trained to protect concentration camps.
For two months the campaign collected more than five hundred thousand rubles, attracting other investors, who financed the project for more than thirty million rubles. Konstantin Pham bought out the rights to film the story and began shooting.
In the case of the Tesla Museum, success can still be explained by the international authority of the great scientist. However, the support that the „Brut“ project received was a surprise even to its founders. And this proves once again: crowdfunding works not only on an equal footing with classical investment. Sometimes the new model demonstrates an indisputable excellence.
Where one investor can make a mistake or change his mind, hundreds of thousands of crowdfunding participants realize any idea by the whole world.