Crowdfunding is becoming more popular topic with every successful campaign. Not only in US – the trend for financing projects by users and potential customers seems to flourish in Poland as well. Of course we did not experienced multi-million raises yet, but giving the population and scale of polish internet comparing to the US, Secret Service magazine success of raising over 142 thousand PLN puts crowdfunding as a serious funding source.
The latest big campaign – Secret Service magazine on PolakPotrafi crowdfunding platform – is not over yet. The astonishing amount was raised in 8 days and there is still 32 days left. This particular raise seems to show all the crowdfunding is about. We have got an old magazine that was read by niche (gamers in this case) that has been seized in 2001. Since then it became something of a legend in the mind of their readers. Now, with few people from the old editorial office and trade mark the project exploits that legend and uses nostalgic and promise of a good old fashion magazine.
We hope the new Secret Service will deliver all the quality and live up to its legacy. But what if it won’t? That is essential question for the crowdfunding: what happens with the projects that promise and do not deliver? Unfortunately right now there is no system implemented to ensure that organizers won’t in any moment pack their bags and leave with the money.
Actually only one type of crowdfunding provide assurance and control for funders: equity crowdfunding, which means that for the many invested in the project you get a share. For now though that form of funding seems a niche in a niche. Only 5 out of 12 platforms in Poland offers the option and it is not clear enough on what bases funders obtain shares. This situation will change soon – in Warsaw in June we witnessed Equity Crowdfunding Conference by Warsaw Stock Exchange and there is an information about foreign equity crowdfunding platform interested in Poland market – BlazeFund.
Aside the nostalgic projects that seems to feed on peoples hopes and memories, we must give it to crowdfunding this – it is an innovation-friendly place. Where corporations do not sees profitable enough project or tries to divert project into more profitable paths, crowdfunding allows innovators to work without that money-driven whip and deliver extraordinary prototypes and devices. For example many of the low-cost 3D printers were kick-started with crowdfunding. Virtual reality glasses or smart watches are another examples of projects that benefits from it.
There is yet another function to crowdfunding that professional investors seems to dig lately. Successful crowdfunding campaign indicates that users would like and buy particular product or service, so for investors it is a proof of concept and an evidence for potentially good investment.
All the pros and cons, news and publicity proves for sure one thing – crowdfunding is here to stay. We witnessed a new business model in a making, a model that can shake things up and allow innovation and unusual projects to have their chance to shine. This time the decision-makers are not big corporation – if you convince your potential customers that your idea is worth buying, you won. Like in the old saying – customer is always right.