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BUSINESS: Crowd Funding by Tatiana Hitchen


The unrealism of Reality TV aside, getting venture capital remains a key challenge for emerging businesses. Opting for less public but equally dispiriting attempts to fund their business ideas, people turn to lenders like banks, only to find that there’s little interest in aiding artisans or the inexperienced. Similarly, although governments have launched schemes


to boost enterprise,


eligibility criteria and bureaucracy can be insurmountable hurdles.


Circumventing the dead ends of conventional routes, the Crowd, expressed through phenomena like social networking and flash- mobbing, has melded with the principles of microfinance in what has been dubbed ‘crowd funding’. Primarily mediated via the internet,


67 | ukhandmade | Summer 2012


crowd funding works on the basis that many small pledges will add up to a reasonable sum to push forward someone’s creative dream.


Fertile Ground Whilst


individuals could set


something up via a Facebook group, a number of websites specifically provide crowd funding support and infrastructure for creative projects, taking a lot of the hard work out of the equation. They operate a little like eBay, insofar as you have a webpage, space for media like photos and videos to help explain and promote your project. All you need to do is come up with a project, put together an enticing pitch and encourage would-be investors to consider making a pledge. The centrality of this also means that those who want to invest in emerging artists


can visit one of these websites and browse for an interesting project, making it easier for both investor and entrepreneur to cross paths.


The main sites typically promise not to charge registration or ongoing subscription fees. Crowdfunder and Kickstarter instead seeking 5% commission from successful projects only. The caveat for entrepreneurs is that if they do not reach their funding target by the set date, all people who have pledged funds will have their money returned to them – essentially, it’s all or nothing. Other sites like Rockethub and Indiegogo don’t impose this requirement, meaning that you can keep whatever you do raise and get bonuses if you reach your target. On the other hand, the commission on funds is greater if you don’t meet


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