Crowdfunding is in
its infancy. Here’s a look at three trends expected to emerge.
1. More groups use
crowdfunding to support innovation challenges to solve complex, social
problems. Communities will increasingly come together to raise
a pot of money to award to an entrepreneur that solves a problem, says Chance
Barnett, the co-founder of Crowdfunder, a Venice,
Calif.-based crowdfunding platform. “That might be solving poverty in an area,
it might be building a mobile solution for people in developing countries who
don’t have the ability to do accounting in a very basic level,” Barnett says. “We
will see a lot of innovation come out because of crowdfunding because people
are willing to put dollars up to solve big problems.”
2. Increased
popularity of local, crowdfunding communities. Amateur
investors often prefer to meet the entrepreneur they are backing face-to-face,
says Barnett. That’s the idea behind his newest venture, CROWDFUNDx, which
launched last week. It’s an online network that brings together leadership
boards in 11 cities across the U.S. and in 12 cities in Mexico to run 120-day
startup challenges culminating in a pitch contest. The local community then
funds the winner through crowdfunding.
3. Women
entrepreneurs stand to raise more investment dollars. Women get
5 percent of all investment capital, says Barnett, but they will have increased
access to funding with crowdfunding. “Not only are women more active on social
media, they are often more collaborative when they do invest, so it is going to
be a really interesting space and it is going to be the perfect place for women
to gain a lot of traction,” Barnett says.
