Crowdfund: meaning, definitions and examples

Etymology

• The term combines 'crowd' meaning a large group of people and 'fund' which refers to money collected for a particular purpose.
• It first gained popularity in the early 2000s with the rise of internet-based funding platforms.
• The concept itself, of pooling resources, has existed for centuries, but the specific term emerged with crowdfunding websites.

Technology

• The online crowdfunding model uses social media and digital platforms to reach potential backers.
• Platforms like Kickstarter and Indiegogo revolutionized how creators gather funds, allowing anyone with an idea to seek financial support.
• Crowdfunding technology often includes tools for tracking funding progress in real-time, engaging more supporters.

Economics

• Crowdfunding allows entrepreneurs to bypass traditional funding routes, reducing reliance on banks or investors.
• It stimulates micro-investment, where many people contribute small amounts, making it accessible.
• This model can democratize funding by allowing supporters to have a say in which projects move forward.

Cultural Impact

• Crowdfunding has empowered creators, allowing diverse projects and ideas that may not fit conventional funding models.
• It has influenced pop culture; for example, many independent films have been made possible through popular campaigns.
• It has changed how people view entrepreneurship and creativity, promoting a sense of community and shared success.

Social Psychology

• Crowdfunding taps into the psychology of collective action, as people feel motivated to contribute to community projects.
• Individual backers often feel invested and connected to successful projects, enhancing their emotional engagement.
• Successful campaigns can create a sense of belonging and shared purpose among supporters, leading to stronger community ties.