Introduction: My ITBusiness.ca blog will cover posts around marketing, social media, crowdfunding and the intersection of marketing and IT. I hope you find it educational and discover new perspectives that you can apply.
Walk down any Main Street in North America and you see entrepreneurship at work. You buy your fresh bread, hardware, technology, crafts and produce, or services like travel, dining, healthcare and clothing. You chat with the owners or staff and enjoy the banter and community, as well as the goods.
Crowdfunding is best known via sites like Canadian platforms FundRazr and Kickstarter for supporting creative projects for artists or cool new gadgets and technology for the geeks among us. Backers pre-order the gadgets or receive perks, like getting their name in the credits of the new film.
Huge growth has also been seen in crowdfunding for charities or personal fundraising for medical, travel, athletics and education. The trend shows no sign of slowing down. Massolutions estimates that the global crowdfunding market in 2013 will exceed $5.3B.
Crowdfunding on Main Street Today
The industry is now hitting an early maturity phase where businesses not generally associated with the strategy are utilizing crowdfunding to help fuel their growth. Here are 3 examples that illustrate this brave new ground on Main Street.
1. Buy Amazing Tea to Support Kenyan Farmers – The founder of Rocky Mountain Bicycles in Vancouver used crowdfunding to raise almost $20,000 to fuel a farmer direct supply of premium Kenyan tea. JusTea is now building the first processing kitchen to craft whole leaf tea in Kenyan farmer co-ops to create a sustainable business for farmers formerly earning just $2 per day.
2. Help eliminate Medical Label Misadventures – Two frontline medical professionals are crowdfunding to jumpstart the launch of a simpler, safer prescription medical label solution that prevents usage errors and harm. They’ve raised almost $8,000 of the $20,000 needed to patent, market, prototype and distribute the labels across Canada. This campaign has been featured on The Crowdfunder TV Show. The marriage of crowdfunding and TV worked so well that this campaign attracted a further $25,000 equity investment from RMAC Surgical to further their entrepreneurial efforts!
3. A safe new home for Three Irish Girls – Three female entrepreneurs in Duluth, Minn., needed to relocate their studio after their existing location became noisy and unsafe. They used perks featuring their home dyed yarn to raise $18,320 – more than 153% of their goal that they had already raised.
Crowdfunding on Main Street Tomorrow
Look for crowdfunding to expand dramatically into areas like real estate, product development and even franchising. The crowdfunding and offering memorandum exemptions under review in Saskatchewan, Ontario and BC will bring in non-accredited investors via portals – further fuelling investment and growth. The promise of the JOBS Act Title III in the U.S. will enable similar participation by non-accredited investors that have been on the outside looking in.
What do you think? Will crowdfunding continue to make inroads on Main Street? Leave a comment with your take.