One of the most iconic monuments in the world wouldn't stand as proudly as it does today if it wasn't for the forward-thinking of one U.S based newspaper publisher! Yes, the Statue of Liberty, a gift to America from the French in the late 1800’s was completed due to money raised through crowd-funding.
The total cost to finance the site and the pedestal on which the statue would sit exceeded $300,000 and at the time, the American Committee wasn't able to raise enough money to finance this. Joseph Pulitzer, who ran a newspaper called ’The World’ embarked on an early form of crowdfunding, involving his fellow Americans in a campaign to complete the project. His six month campaign generated a staggering $100,000 in just five months. This was largely through small donations –in fact over 120,000 donations were reported to be less than a dollar! A very real and enduring example of the power of this financing model.
In those days, not every business would have had the might of Pulitzer, with access to a national newspaper to help raise awareness. However, in this digital era, where social media connects like-minded communities and is easily accessible to all, this is more of a possibility. There are many examples in the US to illustrate how this kind of micro-funding approach is thriving, for example funding platform www.kickstarter.com
To date 87,298 projects have successfully launched via Kickstarter -this amounts to $492 million in terms of money pledged towards projects. All business segments are covered - from music, films and art to design to IT/Technology. Recently, in December 2012, the company launched Kickstarter for the UK market and within the first month £2 million was pledged to UK businesses.
Funding Circle (www.fundingcircle.com) a similar UK-based business model averages around 30 new loans each week to its members. In total more than 10,000 people have signed up to the platform, where businesses can borrow between £5,000 and £500,000 over one, three or five years. Heralded in the UK press as the saviour of SMEs, to date, the total accepted loans on this site amount to over £78m.
On both these sites, those seeking backing make optimum use of press and social media to drive traffic to their pledges and create awareness of their business. Much like the tactics employed by Pulitzer all those years ago…..and look what that got him!
Stay tuned for more industry examples, and positive funding stories.