There are many different ways for a business or an entrepreneur to get funding. Usually, the path is through venture capital, but there are also some rather weird ways of getting funding. Increasingly, the norm is shifting towards what was once a somewhat niche approach.
Crowdfunding has become a wildly popular way to get an idea off of the ground, be it from a new business or a long-standing one.
Empowered by the internet, projects can open up to huge audiences through several different crowdfunding websites to reach a funding goal.
Of course, they do have to offer some incentives to corral the masses, but once they do, a system of tiers, rewards, and updates continues to make the experience of being a backer an enjoyable one. The process plays on classic principles, and by the looks of it, crowdfunding will only continue to grow.
Using the Power of the Crowds
Crowdfunding certainly isn’t a new concept, and its ability to create large pools of money is well known. The simple premise is that, rather than tapping up a few investors or an investment firm for the total sum by giving up a stake in the business, the entrepreneur opens up the funding to everyone.
With different tiers of investment available, many people can contribute a little bit to see the idea become a reality and maybe get a reward for doing so.
It harnesses the power of the crowds in a similar way to other ventures that require large sums of money quickly, rather than building up slowly from little resources, to provide proper incentives for paying customers. The most obvious example of this is in the case of lotteries.
They’ll sell tickets, use the funds generated from those ticket sales to create a prize pot, and also keep a percentage to one side to fund the business and its other goals, such as funding athletic programs, for example.
Similarly, there is jackpot gaming. Anchored in suites and collections of popular slots, a small percentage of every bet wagered is put into the joint pot, which allows the crowd to continue to grow the pot with each spin.
Then, at random, the pots will drop on a lucky spinner. The suspense intrinsic to this randomness, as well as the size of the top prizes, is what makes the game so popular.
Mega Moolah, for example, has become legendary for its prizes, having dropped several eight-digit prizes to date, including one of over £11 million back in December 2023. WowPot! goes even bigger, though, having paid £33 million in that same month.
More People Turning to Crowdfunding
It’s said that modern crowdfunding originated in 1990s Britain, when rock band Marillion sought funding for their planned US tour, and so, turned to their fans. It later became commercialized and a viable business model for operators who’d take a small vig for the funding runs.
Now, there are several crowdfunding platforms, some of which are very specific to certain industries, and others that are incredibly broad and cover just about all lines of work.
Right now, we’re seeing an influx of talent turn to crowdfunding. Over the last year or so, we’ve seen a tsunami of layoffs in the tech and entertainment industry, following several companies over-expanding to meet the demand of the very specific conditions at the turn of the decade without an eye on what would happen when normality returned.
This has inspired a new wave of entrepreneurialism amongst these highly-skilled professionals who were cast out into the cold, bringing new ideas and encouraging even more funding on crowdfunding platforms.
We’ve had tech success on crowdfunding platforms before, notably the Pebble Time Smartwatch raising $20 million in 2015, but there have been plenty since.
Recent big earners of late would include Jump Into Reality, a UK-based immersive realities firm, using Seedrs to hit its funding target, fintech business Holt Xchange from Montréal using FrontFundr to raise money for its seed fund, and ex-Twitter employee Alphonzo Terrell ran out an equity crowdfunding round for his Spill social network app in March 2025.
Now, forecasts predict that the global crowdfunding market is barrelling towards a value of over $5.4 billion over the next eight years, surging from its valuation of $1.45 billion last year.
The reward-based crowdfunding market – which is the part of crowdfunding that most backers are familiar with – is already projected to hit $1.05 billion in total transaction value this year. Tech startups are hot in the crowdfunding scene right now, but so too are the entertainment projects.
Kickstarter remains the dominant force, but such is the demand that Gamefound has become a very real competitor in the gaming niche.
Crowdfunding is becoming the go-to way for entrepreneurs and creatives to get their ideas off the ground, and it continues to empower people to invest and back projects even if they’re not wielding the millions of dollars put up by traditional investors.
