The Crowdfunding Ecosystem: Benefits and Examples of Crowdfunding Initiatives

Abstract

Crowdfunding is a special form of crowdsourcing. The idea of crowdfunding is to collect many small amounts of money from a community in order to support and realize a certain project, and thus to provide a new dimension of venture capital financing. Similar to crowdsourcing, all stakeholders interested in a project idea can support the realization of the project with their funds. The gesture of appreciation and goodwill towards the funders can take various forms, from a simple communication of ‘thank you’, to other monetary rewards, depending on the degree of contribution. In a nutshell, crowdfunding is defined by the scenario when “co-thinking” micro investors provide small amounts for big ideas. Combined with the intelligent use of “crowd-technologies”, crowdfunding shapes new ways of entrepreneurship.

In the meantime/Meanwhile, several crowdfunding platforms exist and inaugural projects have been successfully funded. Approximately 800 different crowdfunding initiatives exist globally and the raised funds exceeded USD 5.1 billion in 2013. Since 2012, the “European Crowdfunding Network”, joined by relevant crowdfunding experts, has aimed at establishing the development of crowdfunding on a common European level. The crowdfunding ecosystem described in this chapter presents along the example of two Austrian platforms a new defined innovation approach, including the “wisdom of the crowds” discernible in all phases of an innovation process.