Traveling all the way from Jerusalem, Israel, scholar Dan Marom brought his talk “The Crowdfunding Revolution: How to raise venture capital using social media” to the One Spark Speaker Series. “A crowd can make a difference,” Marom told the audience. “Technology can make a difference.”
It was obvious where Marom was going with this; crowd plus technology equals crowdfunding. But before the days of laptops and smartphones, people were crowdfunding in a whole different way. The Statue of Liberty was built using funds from the public who chose to support the project.
Soccer clubs in Europe are owned by their fans – similar to the Green Bay Packers in the U.S., a team owned by its community. President Obama’s second presidential election was successful due to crowdfunding done through his website.
Another success story is the Pebble. Tagged as “the first watch built for the 21st century,” the Pebble team raised over $10 million using Kickstarter.
Marom is a consultant for Massolution, a company based on crowdsourcing solutions for enterprises. In a recent study, Massolution reported that in 2012, North America raised over $1.6 billion through crowdfunding. Europe raised $945 million.
According to Marom, there are four types of crowdfunding; donation-based for philanthropy and sponsorship, reward-based for non-monetary rewards, equity-based that includes revenue and profit-sharing models for financial return, and lending-based including person-to-person and person-to-business lending.
“I am a true believer in the power of crowds,” Marom reiterated.