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The Rapid Rise of Crowdfunding

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Every year I make predictions. I predict who will win the Super Bowl. I predict who will win this election or that. And so on. Like most people, sometimes I’m right. And often I’m wrong.
 
However, I rarely if ever make predictions publicly. Unless, that is, I am extremely confident my prediction will come true. Maybe this is a psychological flaw; that I don’t want to feel publicly humiliated by making a wrong prediction. If it is, so be it; the fact is that I only make public predictions when I’m close to certain they’re right.
 
In fact, my last public predictions came nearly 4 years ago today. On that day, in an email to over 80,000 entrepreneurs, I predicted that Crowdfunding (which had just begun) was going to be huge. It turns out, I was right.
 
1) The Growth of Crowdfunding


 
When I predicted the success of Crowdfunding in 2010, it wasn’t even an industry yet, so there are no formal statistics on it. But as you can see in the chart above, $1.5 Billion was raised with Crowdfunding in 2011. This amount increased by 80% in 2012 to $2.7 billion. And then from 2012 to 2013, Crowdfunding increased by 89% to $5.1 billion.
 
2) Why Crowdfunding Has Taken Off

There are several reasons why Crowdfunding has succeeded.
 
One reason might be that we are becoming more and more of a consumer society; which is defined as a society in which the buying and selling of goods and services is the most important social and economic activity. People simply like to buy things, and investing in a company is a type of buying.
 
Another reason is probably that people want to belong and be part of something. By investing in a nascent company, you essentially become part of it. If it succeeds, you were there from the beginning. That’s exciting!
 
Another reason is that we more and more live in an entrepreneurial culture. Entrepreneur success stories, like Mark Zuckerberg and Facebook, are now mainstream media. Top entrepreneurs have gained the public status formerly only occupied by actors, musicians and athletes. Likewise, television shows like Shark Tank have positively shined light on entrepreneurship.
 
3. Will the Growth of Crowdfunding Continue?

 
Yes, I am 100% confident that Crowdfunding will continue to rapidly grow. Here’s why. While the JOBS was signed in April 2012, it did not allow for equity-based Crowdfunding until the SEC approved certain regulations. Some of those regulations have since been approved. For example, "accredited investors" can now make equity-based Crowdfunding investments. But non-accredited investors still cannot. When this changes (which is expected later this year), and the general public can invest, the Crowdfunding market should grow like wildfire.
 
4) How Can You Take Advantage of the Rapid Rise of Crowdfunding?

 
To raise Crowdfunding, do the following:

1. Follow the 14 Step Formula

Below are the 14 steps I teach in my Crowdfunding Formula course that are critical to successfully raising donation or rewards-based Crowdfunding.

1. Choose your Crowdfunding platform
2. Create an account
3. Create your funding project
4. Categorize your project
5. Create your project tagline
6. Create your project teaser text
7. Create your full text project summary
8. Determine the right fundraising amount
9. Determine the right donation time
10. Develop your list of rewards
11. Create your project visuals
12. Create your project video
13. Promote your project to your network
14. Maintain and update your project

2) Become a Great Marketer

No matter how good your idea is, you will need to market it to others to get them to invest in it. A good analogy is this: every day thousands of people release videos hoping and thinking they will go viral, but they don’t. Even if their video is great, they need to get it in front of a bunch of people who watch it, like it, then spread the word.
 
In 2010 I called Crowdfunding the most exciting thing that’s happened in the entrepreneurial space since the first venture capital investment was made in the 1950s. Crowdfunding is helping entrepreneurs raise money and gain customers, and more and more Crowdfunding success stories will be featured in the media in the coming days. Hopefully it’s you they’ll feature!


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