Table of Contents
1. Introduction 1
Definition of keywords 2
1.1.1. Crowdsourcing 2
1.1.2. Crowdfunding 2
Factors Influencing crowdfunding 2
Scope of Paper 2
2. Crowdfunding Business Models and Investor Drivers 4
Crowdfunding Business Models
* 2.2. New Regulation 6
* 2.3. Investor Drivers 5
3. Global Intermediaries & Example Projects 4
* 3.1.Kickstarter 5
* 3.2. IndieGoGo 5
* 3.3. Other Platforms 5
4. Turkish Intermediaries & Example Projects 4
* 4.1. Projemefon.com 5
* 4.2. Biayda.com 5
* 4.3. Ekonomiyekadingucu.com 5
5. SWOT 4
* 5.1. Future Implications and Forecasts 5 6. Municipality Co-Create Idea
* 6.1. Municipality - Citizens 5
* 6.2. Global Benchmarks 5
* 6.2.1. Spacehive 5
* 6.2.2. Citizenvestor 5
* 6.3. Municipality Co-Create Model 5 6.3.1. Prioritize on Hand Projects 5
6.3.2. Raise Funds for out of Budget Projects 5
Crowdfunding is one of the new buzzwords of today. Derived from the word “crowdsourcing”, it enables various projects to come alive with the financial help of an “interested crowd”. In return, some rewards are given to the crowd, who decide to take part in these projects by doing a contribution. According to The Economist (2012), crowdfunding is the “new thundering herd”. In 2012 Crowdfunding is expected to raise $2.8 billion vs. $530 million in 2009.
Figure 01. Crowdfunding forecasted growth.
Crowdfunding projects in the past had no entrepreneurial ambition. It was not seen as a financing instrument for start-up businesses. It was seen as a system, which leads to the mobilization of the crowd for microfinancing a project they feel attracted to. Although this system is not new, the recent changes in technology made it possible for the project owners to reach a higher number of people with the new features of Web 2.0 like viral networking and marketing and social networks. This technology makes it possible to reach the crowd on a global scale within a very short period of time (Joachim 2011). 1.1. Definition of keywords:
1.1.1. Crowdsourcing: As crowdfunding is derived from croudsourcing, it is vital to give its definition first. The term crowdsourcing has been first used by Jeff Howe and Mark Robinson in the June 2006 issue of Wired Magazine, an American magazine for high technology. Crowdsourcing is defined as “the process of outsourcing tasks to a large, often anonymous number of individuals, a "crowd of people" (here: the Internet community) and drawing on their as-sets, resources, knowledge or expertise.”(Joachim 2011, p.8) In other words, for-profit companies create value by using consumers as volunteers and almost free task force. 2.1.1. Crowdfunding: The most inclusive definition of crowdfunding comes from Belleflamme, Lambert and Schwienbacher (2010). According to them, crowdfunding is defined as “an open call, essentially through the Internet, for the provision of financial resources either in form of donations (without rewards) or in ex-change for some form of reward and/or voting rights in order to support initiatives for specific purposes".
2.1. Factors Influencing Crowdfunding:
There are several reasons why the entrepreneurs, artists and firms are crowdfunding their projects and ideas. As the trend for crowdfunding increases, more reasons may be added to the list below. In...