"Des waerelds doen en doolen, is maar een mallemoolen,"

"Des waerelds doen en doolen, is maar een mallemoolen," engraving from Het Groote Tafereel der Dwaasheid, 1720.

"The actions and designs of the world go round as if in a mill." South Sea bubble financial crisis.

Tuesday, January 29, 2013

What does crowdfunding funds?

courtesy of saleschase.com where you can find the entire infographic

Crowdfunding is a form of financing start-up and SMEs that is becoming trendier and receiving a lot of attention lately. Experts do not see it replacing private equity and loans from banks however. The knowledge and management advices that SMEs get from private equity and bankers cannot be replaced by the power of crowd. There is, arguably, something unique in the lending relationship which has a lot to do with the transfer of knowledge and information. Crowdfunding, for all its benefits, does not reduce the distance between the investor and its investment location. Moreover, it seem more appropriate to fund certain sectors than other. The Economist provides the figures: 
A total of $320m was pledged by 2.2m people, making possible creative projects including a documentary on fracking, a home aquaponics kit and a community centre for circus arts. Games, a category which includes video, board and card games, received the most support, with $83m pledged to more than 900 projects. Given their high development costs and passionate fans, video games are a good match for crowdfunding, particularly as established publishers churn out ever more sequels, leaving a long tail of unmet demand

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