The History and Evolution of Crowdfunding

Many of us often tend to make the mistake of thinking that crowdfunding is something new. However, the concept of crowdfunding is much older that many of us believe. Many of you would be surprised to know that crowdfunding has been around for centuries. With the advent of advanced technology, there has been several changes in the concept in the last few years.

The Irish Loan Fund created by Jonathan Swift and Dr. Younis’ Grameen Bank deserves special mention as the pioneers of micro financing. However, this is beyond the scope of this article. On the contrary, we will focus solely on crowdfunding as a web related phenomena that has grown parallel to the development of the social web.

The term crowdfunding was used for the first time in the year 2006 when Michael Sullivan launched Fundavlog. This, however, was a failed attempt to fund events and projects related to a videoblog. The term crowdfunding started gathering momentum after a few more years with the introduction of platforms such as Indiegogo and Kickstarter.

If the crowd and the web are considered to be two essential elements of crowdfunding, its very first examples came into being in the 1990s with the emergence of some platforms for charity fundraising and projects funded by Internet-based campaigns. The UK-based charity fundraising platform JustGiving was founded in the year 2000.

Kiva was launched in the year 2005 as the first ever platform where entrepreneurs could lend money to develop their ideas. Now, Kiva is one of the most successful micro-lending platforms all over the world. The success of Kiva created the path for the development of peer to peer lending platforms like Zopa, Prosper, Lending Club, etc.

Out of all present day crowdfunding platforms, Indiegogo was the first one to be launched by Danae Ringelmann and Slava Rubin in 2008. Kickstarter was launched within one year in 2009. Both these platforms work around the same principle and they are extremely popular in the current crowdfunding market. The biggest difference between these platforms compared to the previous funding platforms is that the contributors were no longer expected to get their money back. Instead, they receive rewards based on the plan of the project owner. The next few years saw the launch of several other similar platforms that made life easier for independent project owners looking for an alternative source for funding.

One of the most important factors behind the rapid growth of crowdfunding platforms in the last few years is the recent global recession. This highly turbulent time has seen many established businesses struggle. Some others have managed to survive this tough time relying on different crowdfunding platforms. Looking at the present market scenario, the way ahead looks extremely promising for crowdfunding.

At Crowdfund Buzz, we help you materialize your unique ideas with our comprehensive support via crowdfunding consulting and crowdfunding campaign promotion to help crowdfunders achieve their crowdfunding goal. To date, we have helped many of our clients achieve and even exceed their funding goals using different crowdfunding platforms. Contact us today, if you have an idea that can make a difference in the world and we’ll do our very best to help you make that difference.