Pre-Selling the Future

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Pre-Selling the Future

Consumers, philanthropists, and investors are increasingly looking to support and shape products, good works, and business ideas long before they become reality.

Some time ago, our friends at highlighted the emerging population they refer to as presumers.1 These are consumers who are clamoring to support, be involved with, and fund products and services at the prelaunch stage. And, it's this group that is fueling the burgeoning crowdfunding movement.

In a segment called Bypassing Wall Street in the January 2012 issue of Trends, we discussed the forms of crowdfunding that are relevant to the businesses that could not get attention from traditional venture capitalists.2 The kind of funding networks in which presumers get involved only overlap slightly with those.

According to the 2013CF Crowdfunding Industry Report, from massolution®, a research firm specializing in the crowdsourcing and crowdfunding industries, crowdfunding is accelerating at an unprecedented rate.3 Today, it is impacting government policy, informing enterprise innovation, and changing the role of financial institutions around the world. In fact, it looks like global crowdfunding volumes will exceed $5 billion in 2013.

According to Carl Esposti, CEO of massolution, "While lending-, donation-, and reward-based crowdfunding have thus far been leading this global financial revolution, equity-based crowdfunding is about to take center stage in the U.S. The JOBS Act, which will allow nonaccredited investors to make investments in exchange for equity, is expected to go into effect by the end of 2013."4

Although crowdfunding offers a growing number of countries with opportunities to access funds, North America and Europe raised much more capital than platforms in other regions. Specifically, in 2012:

  • North American crowdfunding volumes grew 105 percent to $1.6 billion.
  • European crowdfunding volumes grew 65 percent to $945 million.

The growth in funding volumes was primarily driven by lending- and donation-based crowdfunding, and by adoption of reward-based crowdfunding...

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