Why does crowdfunding exist?

Jan 17, 2019 2:16:25 PM / by Lucas Weaver | 2 minute read

Remember the good ole days? Back when there was a king who owned everything and anyone who wanted to do something had to ask him for permission? Well, they were good days if you were a king.

Imagine being one of those merchants back in the 1500's.

"Well Your Magesty, I want to start a business sailing crazy far away to buy this thing called 'silk' in Asia, and then I want to sail back and sell it to your richest subjects, and of course give you half of all the profits just because you're such a great King."

If he said yes, you could potentially have a nice life as a rich merchant. If he said no, it's back to being a peasant for the rest of your life. Kinda sounds like the American TV show Shark Tank...

Luckily for us, it's the 21st century and things have changed for us former peasants. We still have uber-rich people and venture capitalists that basically still resemble kings. However, now if the king says no, we still have other options.

Think of Kickstarter. Probably the most famous crowdfunding company in the world, Kickstarter helped launch crowdfunding into the mainstream. If you come up with a great product idea but the venture capitalists you pitch it to are too out of touch to realize the need for it, you can go take your idea to a group of thousands of people just like you who might actually get it.

These people don't have millions to invest in your idea of course, but they don't need to! All they need is a small amount of money to contribute to the greater cause. They only need a small amount because there's an entire crowd of people just like them who are also willing to invest in ideas they think are good.

That's why crowdfunding exists. Because it's a NECESSITY. Individual investors don't always see the value in products or companies that end up changing the world. Think of all the people who turned down Steve Jobs when he founded Apple.

The problem for many people, though, is that they see the need for certain products or companies, but they just don't have the money to go out funding entire businesses. And that's the problem crowdfunding solves. It gives you and your peers the chance to get together and empower your money to make a real impact.

What can you do with €50 to change the world? Truthfully, not that much. But what can you and 3,000 other people do with €50? Well for one, you can provide €150,000 of growth capital to an entrepreneur who has already proven they can successfully run a business.

lendahand crowdfunding project to fight climate change

Talk about making a real impact.

So why does crowdfunding exist? In short, because we need it, and, because we want it.

We want to take the future of the planet into our own hands. We want to use our money to do good in the world, not just maintain the status quo of poverty, inequality, and climate destruction.

We've come a long way since the days of tyrannical kings. Let's see how much further we can go.

Topics: crowdfunding

Lucas Weaver

Written by Lucas Weaver

I'm a member of the Growth team here at Lendahand. I believe that people want to do their part to better the world if you can provide them with the opportunities to do so in a sustainable way. I think crowdfunding with Lendahand is one of those opportunities.

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