What are the BIG crowdfunding trends that you can expect to see? Let’s find out! Generic crowdfunding platforms such as Kickstarter and Indiegogo will always dominate the crowdfunding scene. But what we expect to happen is the emergence of crowdfunding platforms that are directed at certain niches.
P2P lending will go mainstream crowdfunding trends: P2P lending means peer-to-peer lending. We fully expect it to go mainstream and serve as an alternative to traditional forms of investment. P2P lending would take away the interest payments from banks and put them directly into the pockets of consumers. So this is something that is very advantageous for the small investor and should be taken seriously by regulators.
Emergence of Niche-specific Platforms: Generic crowdfunding platforms such as Kickstarter and Indiegogo will always dominate the crowdfunding scene. But what we expect to happen is the emergence of crowdfunding platforms that are directed at certain niches. We already have niche-specific platforms such as CrowdJustice that provides legal support, as well as several crowdfunding platforms for mobile apps development. More are expected to come up in 2016.
Celebrity Involvement in Crowdfunding: We expect celebrities to be roped in as endorsers by crowdfunding campaigns. Tennis star Andy Murray recently endorsed a crowdfunding project. We expect to see more incidents of this. Also, a lot of specialist advisors will get involved as well and offer expert guidance to small businesses raising money on Kickstarter and other platforms.
Investments in Crowdfunding Platforms: A lot of major investors have already made their presence felt in crowdfunding. Popular crowdfunding platform announced recently that it has raised over $15 million from investors. Crowdcube, another popular platform, raised over $9 million. Crowdfunding platforms need all the investment they can get to grow into new territories and offer a wider range of services.
Crowdfunding Before Venture Capital: In an interesting turn of events, many startups have decided to try out a crowdfunding campaign before seeking venture capital. This is not necessarily because they need the money, but to prove to potential investors that they have a viable product or solution for which there is a demand in the marketplace. Of course, any capital raised by them through crowdfunding comes handy, but it is not the main objective. They stand to gain a lot more from venture capitalists, find investor and find angel investor once they have proved themselves on crowdfunding platforms.
Equity Crowdfunding is Coming: The JOBS Act was passed in 2012 and it has since set in motion a series of actions that will soon open up equity crowdfunding for everyone, not necessarily just for the loaded. Equity crowdfunding will be oriented towards the masses and will completely transform fund raising for startups and small businesses, reducing the role of traditional sources of capital.
Large Number of New Crowdfunding Platforms: The most important players in crowdfunding are getting even bigger, but this hasn’t stopped the entry of hundreds of new players into crowdfunding. Most of the new players in crowdfunding are young entrepreneurs who realize how hard it is for small business owners to raise funds from traditional sources and want to help out those who need capital to grow their business. We also expect a large number of crowdfunding platforms targeted at nonprofits to make their presence felt.