ANALYSIS
Is Macedonia Ready for a
Crowdfunding Revolution?
Author: www.Letsfundit.mk
Crowdfunding is the process of asking the general public for startup capital for new ventures, innovative projects, events and initiatives. Essentially, it
allows entrepreneurs, small business owners, organizations and individuals to bypass more traditional
sources of funding entirely and pitch ideas to a potentially huge number of everyday Internet users.
And crowdfunding doesn’t just help creators finance
projects; it also helps them gauge public interest before launching something new.
business owners make educated guesses about
products that their target market may want to buy.
Using crowdfunding, they can test ideas at little upfront cost and adjust spending accordingly. What’s
more, crowdfunding provides a better way to generate interest in projects and pre-orders. Not only are
customers more emotionally invested in the development process, they’re also more emotionally invested in the end result.
Crowdfunding has been around for decades as a concept but what’s new is the online approach that allows creators to use intermediary services to essentially build promotional web pages for whatever they’re trying to get funded. Viewers are offered
special rewards in exchange for pledges rather than
equity or a share of profits. Benefits often take the
form of exclusive merchandise, advanced access to
new releases, or more personalized incentives.
In the past 5 years the crowdfunding industry has undergone remarkable growth, estimated to be around
1,000% while providing around $10 billion in funding
to startups and small businesses. The global crowdfunding industry’s exceptional growth is not likely to
slow down this year either, since, according to early
forecasts, the market is expected to grow by an additional 92%. The overall economic value of the industry is expected to reach approximately $3.2 trillion by
2020, if current trends are sustained.
Crowdfunding is not only about raising money. In order to succeed, the creator has to “give in order to
get” funds in return. If he simply asks for contributions, and offers nothing of value in exchange, he’ll
quickly discover the difference between crowdfunding and charity. Backers expect meaningful returns
in exchange for contributions and that means offering compelling rewards. Under typical scenarios,
There’s no denying that crowdfunding represents a
fundamental change in the way technologies, products and entrepreneurs are evaluated. Until recently, a relatively small number of very wealthy individuals held the purse strings of the creative world.
Bank loans, micro crediting, few grant opportunities and a little group of venture capitalists and angel investors were the only supporters of innovative
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