You can find the original version in Chinese at the end of this article.
For the time being it is possible that everyone can realize their dreams via crowdfunding platforms, which provide a new chance for individuals to raise funds for their projects.
This year, Peer2Peer platforms have witnessed dramatic growth and garnered more and more attention. In 2013, $5.1 billion was raised through crowdfunding in total, of which 90% was concentrated in Europe and America. However, The World Bank has predicted that in 2025 the total raised through crowd-funding platforms will exceed $ 96 billion, with substantial growth in Asia.
P2P and crowdfunding will bring a change to the current unbalanced Chinese internet finance field where uneven allocation of financial resources will be adjusted and the interest rate of private financing will be lowered by the increase in direct financing, which currently accounts for only 15% of the Chinese online financial market, whereas this number in US is 80%.
There are many different types of crowdfunding. It can be divided into ‘Products crowdfunding’, ‘Lending-based crowdfunding’, ‘equity crowdfunding’, ‘charity crowdfunding’ and so on. This article will address six possible business modes and the positive social influence of crowdfunding.
1/6 A stage for the reborn products
There are many of opportunities for artists and entrepreneurs on crowdfunding platforms, where they can show their talented ideas and products. Designers can also present their design works by creating crowdfunding projects and getting them approved by consumers. If the products are attractive enough, designers can easily raise enough funds through crowdfunding and find manufacturers to turn their ideas into physical products. In this sense, both producers and consumers can be generated from crowdfunding campaigns, which will not only bring profit to investors and producers, but also help the designer achieve their own self-value.
Designers who design lighting, costumes, tools, households, arts and crafts as well as advertisements, are especially suitable for crowdfunding campaigns. Once crowdfunding platform combines with innovation from brilliant and competitive designers and producers, businesses will respond quickly to help designers with industrial productions and marketing, in order to optimize potential profit from designers. In this way, designers themselves gain credibility, while they also provide an opportunity for businesses in need of creative individuals. Crowdfunding offers a tremendous possibility for a designer’s business development.
2/6 A platform for the promotion of high-tech products
Our modern society is witnessing the age of technological transformation, meaning our living habits and social actions can be greatly aided with the use of mobile equipment, social media and GPS. The emergence of wearable devices and various types of sensors will once again revolutionize the technology market. This huge market has already attracted massive investment. Accordingly, prototype wearable devices require testing in order to improve the function and design to get it ready for market.
Here with the help of crowdfunding platforms, wearable devices can rapidly attract users participation for testing, providing feedback and gain more attention from potential consumers and inverstors. All of this will advertise the product without any cost to the creator. Innovative products draw attention from the public and crowdfunding platforms can increase awareness of the product, while also raising the commercial value of the crowdfunding platform.
Nevertheless, professional venture capital can also be involved in crowdfunding since they’d love to offer those high-tech products with financial support. Since the investment of wearable device is too demanding for lending-based and equity crowdfundings, production crowdfunding will assist those products to locate the target customer and upgrade the products with the feedback from their crowdfunding campaigns. This will easily work out because the audience of crowdfunding sites come from everywhere and have relatively better educational background and are more professional.
It will be a win-win case if high-tech products join hands with crowdfunding platforms: the new products will be equipped with better promotion and the crowdfunding sites will get more reputation and traffic. This virtuous circle will bring big chance for a big market. In China, high-tech products is still under development, also the crowdfunding platforms selves are not mature enough to take more responsibility. Hence one or two hot cases are needed to detonate the market, and obviously, the wearable devices are the best tipping points.
Crowdfunding platforms provide entrepreneurs with support and help them gain real commercial experience. Next time we will introduce two more possible models of crowdfunding, don't miss them!
3/6 Crowdfunding campaigns as brokers for artists
4/6 Crowdfunding campaigns as angel investors for software developers
Original from: http://www.donews.com/net/201411/2864003.shtm
This is the official blog of Kapipal. Check back often for updates on what's new at Kapipal, as well as ways to make your campaign shine! As always, we value your feedback, so please don't be shy — comments are encouraged!