Crowdfunding is booming. A report by Massolution, a research firm, forecasts that $2.8 billion will be raised worldwide this year, up from $1.5 billion in 2011 and only $530m in 2009 (see chart 2). There are over 450 “crowdfunding platforms”, including four in China, up from under 100 in 2007, with Kickstarter America’s largest. This month Indiegogo, its closest rival (though global and with a broader mix of projects), secured the biggest chunk of venture capital so far for crowdfunding.
The effect of this has perhaps been most marked in the creative arts: around 10% of the films shown at the Sundance and Cannes festivals this year were crowdfunded, says Mr Strickler.
Projects that can raise 20-40% of their target amount from online “friends and family” do far better at getting strangers to contribute, says Mr Rubin. Videos also help. Campaigns with them raise over twice as much as those without.
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