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Cash from the crowd

From bailouts to potato salad - everything seems to be crowdfunded these days.

Joanne Carew
By Joanne Carew, ITWeb Cape-based contributor.
Cape Town, 09 Jul 2015

New York's Statue of Liberty was shipped to the Big Apple from France in the late 1800s. But Lady Liberty had no plinth to rest upon. And funds were scarce. Enter well-respected publisher Joseph Pulitzer; a man who could be described as the father of crowdfunding.

What I like about this type of funding scheme is that it gives everyday citizens a viable opportunity to champion causes they actually believe in.

Promoting the fundraising efforts in his newspaper The New York World, with the help of more than 160 000 donors, Pulitzer was able to find the perfect perch for the now iconic statue.

Typically facilitated through the Internet, crowdfunding sees a large number of people pooling their monetary resources to finance a specific project or venture. And these projects or ventures can be anything really.

In 1997, a British rock band called Marillion collected a sizable wad of cash ? $60 000 to be exact ? to fund a US tour via fan donations. Last year, one man's silly attempt to raise $10 to buy the ingredients required to make a potato salad started a spud revolution, garnering over $55 000.

And today, London shoe shop worker Thom Feeney has asked global citizens to donate a few bucks to bail Greece out of its current economic predicament. Feeney launched his initial attempt on Indiegogo and raised roughly EUR2 million during the course of the 10-day campaign. Which may sound impressive but is far from the EUR1.6 billion required to repay the Hellenic nation's sizable debt. Undeterred, Feeney has rebooted the campaign, highlighting that if the 503 million people who call the European Union home all contribute just EUR3, it would be enough money to get the country back on its feet.

What I like about this type of funding scheme is that it gives everyday citizens a viable opportunity to champion causes they actually believe in, be it a rock band sharing their musical talents, or a guy looking to help a country out of its financial troubles. Because we all care about different things, this sort of initiative allows us to seamlessly connect with people who are willing to support our shared interests. And the types of projects that have come to fruition through this Web-based monetary collaboration span various fields.

In an industry where creative concepts require sizable amounts of venture capital to become a reality, some tech start-ups have found other ways to share their ideas with broader markets. Development of the original Pebble "smartwatch" was funded via public contributions. Run in 2012 through Kickstarter, a popular funding platform for creative projects, the campaign is still one of the site's most successful endeavours. And in March this year, the company further showcased its crowdfunding clout when it launched a second campaign to fund its new Time smartwatch, which garnered well over $20 million in support in about four weeks.

Similarly, the Oculus Rift virtual reality headset would never have found its way into the hands of avid gamers were it not for the support of 9 522 Kickstarter backers. And just two years later, the company was snapped up by Facebook for a cool $2 billion. Nice.

Contributing to the community

Closer to home, in 2013, social entrepreneur Patrick Schofield launched Thundafund with the aim of helping local businesspeople realise their dreams. The difference between Thundafund and some of the more established international crowdfunding platforms is a focus on providing aspirant entrepreneurs with an opportunity to test the waters and determine if their bright ideas are actually viable. And Schofield and co are rather stringent about this - of the 1 400 possible projects that have been submitted in the last two-and-a-half years, only 160 have actually gone live on the site.

Western Cape radio station One FM is one such Thundafund hopeful. With the slogan "together as one", it seems quite fitting the station called on listeners to help it go live after securing a broadcast licence from ICASA in August last year. Spearheaded by Ian Ward, founder of The Blouberg Development Foundation, the plan was to spend the money raised to set up studios and purchase broadcast equipment. But alas, the campaign, which ran for about six weeks between May and June 2015, fell about R548 950 short of its R550 000 target. Yip, it only amassed R1 050. So apparently South Africans aren't that interested in community radio?

What they are keen on, however, is chocolate. One of Thundafund's biggest success stories has been Honest Chocolate, which raised close to R70 000 to open a boutique chocolate caf'e in the Cape Town City Bowl. And having met its first target, it continues to use Thundafund to generate the money to refurbish the caf'e.

For me, the beauty of crowdfunding is that it doesn't matter if your concept is revolutionary or ridiculous, as long as you can convince enough people to spare a little cash to give your idea a chance, you may just have a shot at making your dreams a reality.

* A former ITWeb journalist, Joanne Carew now resides in the Mother City, where she is admiring the mountain and completing her Masters studies at UCT.

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