Recently, it is not rare to read about the so called “crowdfunding fatigue”, which indicates the feeling of some people, annoyed by too many requests for participating into crowdfunding campaigns. But does such a thing as crowdfunding fatigue actually exist?
Crowdfunding has developed as an alternative source of finance only in the last 6-7 years. However in some markets, particularly favorable to entrepreneurship, creativity, social media and online payments it established and grew faster than elsewhere. An example is the USA - a market of 300 million people - where crowdfunding is not equally developed and used everywhere. Some areas, for example New York and Los Angeles, where there is a high concentration of entrepreneurs, high net worth individuals, designers and creative people, who often communicate via social networks, have been and still are perfect grounds for reward-based crowdfunding to flourish. In fact, there, reward crowdfunding is currently a quite common method to raise seed capital for different kinds of creative and social impact projects. In these areas, it might make more sense to talk about crowdfunding fatigue then for instance in France or Italy, where it is not yet so common.
Another observation that has to be made is that the term “crowdfunding fatigue” is too generic. In fact, most of the times it is used in referral to reward crowdfunding, which is the first type of crowdfunding that has been developed and that it is already established in many places, as no particular regulation is needed. However, as Crowd Valley pointed out in other occasions, crowdfunding is far more than just reward crowdfunding. Securities crowdfunding, which includes equity and lending crowdfunding, is still in its infancy stage and in many countries it is not allowed yet, because of the lack of local specific regulations. This typology of crowdfunding finds application in several fields: from renewable energy sector, to real estate, passing through small businesses, like micro-breweries. It looks like securities crowdfunding is more about innovating something already existing - i.e. investment in different assets -, making the process more cost-efficient, transparent and democratic. It seems unlikely that people feel annoyed by something that has been put in place with the aim of simplifying an already existing process and increasing the number of investment opportunities investors have access to.
Last but not least, it is important to keep in mind that crowdfunding it is an innovation and, as such, people need some time to understand how to use it in a wise and proper way. Think how you were using Twitter or Facebook the first time you signed up and think how you use them now. The education process for the use of innovations requires time and patience and this is true also for crowdfunding.
Photo credit to: Claudia Stritof http://bit.ly/1q9xxHV
Another observation that has to be made is that the term “crowdfunding fatigue” is too generic. In fact, most of the times it is used in referral to reward crowdfunding, which is the first type of crowdfunding that has been developed and that it is already established in many places, as no particular regulation is needed. However, as Crowd Valley pointed out in other occasions, crowdfunding is far more than just reward crowdfunding. Securities crowdfunding, which includes equity and lending crowdfunding, is still in its infancy stage and in many countries it is not allowed yet, because of the lack of local specific regulations. This typology of crowdfunding finds application in several fields: from renewable energy sector, to real estate, passing through small businesses, like micro-breweries. It looks like securities crowdfunding is more about innovating something already existing - i.e. investment in different assets -, making the process more cost-efficient, transparent and democratic. It seems unlikely that people feel annoyed by something that has been put in place with the aim of simplifying an already existing process and increasing the number of investment opportunities investors have access to.
Last but not least, it is important to keep in mind that crowdfunding it is an innovation and, as such, people need some time to understand how to use it in a wise and proper way. Think how you were using Twitter or Facebook the first time you signed up and think how you use them now. The education process for the use of innovations requires time and patience and this is true also for crowdfunding.
Photo credit to: Claudia Stritof http://bit.ly/1q9xxHV
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.