Crowdfunding: Lost In The World Of Man’s Translation And Confusion

It was only several years ago that crowdfunding stormed the financial scene as a non-conventional means of sourcing funds for worthwhile projects and startups. Thanks to its less complex nature, crowdfunding soon became the “new Jerusalem” through which boot-strapped and desperate entrepreneurs were able to raise the much needed capital to put their ideas into realistic production.

Crowdfunding is a result of combining the urgent needs (cash) of the entrepreneur with the perceived future needs (goods) of the public. By doing that, it cleverly brings to the fore the sales in a clean and precise swapping of intent and pure commitment, a process that has created some of the most successful new businesses in the market.

But, unfortunately, something happened somewhere down the road and the good name of crowdfunding was bartered, torn to shreds and stigmatized as the new e-begging bitch in town.

Like a sacrificial lamb, the character of crowdfunding and the numerous reliefs and joys it has brought to mankind has been dragged mercilessly to the altar of men’s (and women’s) reckless opinions and slaughtered without reservation.

But is crowdfunding begging in the real sense?

Before you say “quit the delusion, crowdfunding is begging, OK,” shouldn’t we go further and allow the norm to defend itself? Let us find out precisely what crowdfunding actually means.

But bear this in mind, the belief that crowdfunding is begging is outright nonsense and could easily be debunked.

Let’s Define Crowdfunding For The Confused

A quick Google search could get you any site that would break down the benefits and different forms of crowdfunding.

Crowdfunding is an innovative method of raising funds by seeking financial contribution from a sizable number of people—friends, family, complete strangers or customers. It is a process during which the project or would-be business owner ask for a small amount of cash from people in a crowdfunding platform or website.

Despite some of the well thought-out opinions and anti crowdfunding articles, there really isn’t a solid enough case that should convince anyone that crowdfunding is begging. Let’s not play ourselves now.

Most of the people with negative opinions of crowdfunding forget that there are different types of crowdfunding. We have donation crowdfunding, reward crowdfunding, equity crowdfunding, and debt crowdfunding.

For instance, in a reward crowdfunding, the people that contribute to the business or project gets an incentive or a reward. So how is this begging? This is the type of crowdfunding that most companies utilizes when sourcing for funds. A ton of startups also used this type of crowdfunding to test the market efficacy of their products or services.

People are quick to say that since you are “pleading” to get cash, it is begging. What?? Are we supposed to command people to part with their money just because they want to be of service? That is a silly excuse.

It’s another way for artists to get money to fund their projects. When it comes to music for example, people like to steal it but fail to realize that artists have to pay for studio time, mixing and mastering, marketing and promotions, etc. You’re already crippling a musician’s source of income with free downloading so it shouldn’t be a big deal to donate money to show support.

It’s a shame that people love the creativity but ignore the blood, sweat and tears that goes into creating. Imagine how frustrating it is for a musician to know that people can acknowledge how talented they are but can’t show their support. This isn’t to shame anyone who downloads music for free since downloading isn’t going anywhere but this article is about making people realize the importance of crowdfunding.

Below are three reasons why the belief that crowdfunding is begging is straight BS and nonsensical.

• Crowdfunding Isn’t A New Way Of Funding

Crowdfunding is an innovative way of funding, in the sense that it uses more flexible and less complex means of sourcing for funds. But, it is not an entirely new phenomenon.

The history of crowdfunding goes back to the 1700s. For instance, books were crowdfunded for many centuries when authors and publishers advertise their book projects in a form of subscription schemes. Crowdfunding only became innovative, starting from 1997 as the Internet became the primary focus of financial and economic growth.

The origin of crowdfunding is well documented and its historic practices have always been part of human financial needs.

Therefore, those who say that crowdfunding is begging, should know that this type of “begging” is an acceptable practice that has been in style for hundreds of years. Whoever feels that crowdfunding is begging is out of touch with reality. If it wasn’t begging back then, it certainly isn’t now, and anyone calling it begging is simply arguing a baseless opinion.

Whether we like it or we do not, crowdfunding has been around for awhile and it’s here to stay. Regardless of the detractors, there have been some highly successful crowdfunding campaigns.

If not for crowdfunding, who would have known that people would love and patronize a cooler with knobby tires, a built-in speakers and built-in blender. But that is exactly what happened when a successful crowdfunding campaign resulted in one of the best selling coolers in the world. The records are there for all to see, and if you don’t already know, crowdfunding helped to raised more than $34 billion worldwide in 2015.

• It’s A Way To Support The Brands You Like

It is laughable when people call crowdfunding begging. What is wrong in asking for support from the people who say they believe in your idea(s)? The premise that rules crowdfunding is that the “contributor” or “funder” receives something in return for their investment. ROI – return on investment. What type of return, how, or in whichever form or manner they get their return is best known to them and shouldn’t be questioned by anyone.

If someone chose to support a crowdfunding campaign seeking to pay for a dog’s leg operation, it is because they love dogs and the return on their investment is the joy that they derived in being part of improving the dog’s health. Why should anyone have a problem with that? Typically, the anti-crowdfunding camp would say the author is begging because he/she could have borrowed the money from friends or family or through personal loan, as suggested by this article. The fact remains that people give support to whatever they believe in, and whatever reward or benefit they derive is down to them, not from another anonymous opinion that contributes to the noise. Same thing applies in the world of business.

People support brands and businesses that they enjoy all the time. Why should crowdfunding be any different? We always buy something that we need or want. We give money in exchange for something. Same goes for crowdfunding, except it helps the person or persons being funded to create something of value to provide their customer, client or fan. There is always an incentive to fund a brand that you already invest your time and energy into any way.

It’s also a way to connect on a human level. No one is invincible or invulnerable 24/7. We’re all human and we’re all vulnerable. Asking shows a type of vulnerability that can be admired, simply because it shows that you’re not “too proud” or “too prideful” to ask for help, as Amanda Palmer aptly put it in her video.

Pride and ego has to be killed on both sides. The ones who want to use a crowdfunding campaign to fund their projects need to kill their pride and ego. The ones being asked to help fund projects need to kill their pride and ego. It’s another way for a brand and their customers to connect and collaborate on something that can be created by both.

It is foolish to die silently in pride and worry when you can learn to stop worrying and humble yourself enough to allow others to help you. Amanda Palmer couldn’t have said it better in the “Art of Asking.”

• It’s A Fair Exchange

Some people love to compare crowdfunding to street begging or panhandling, but those are false equivalencies. When done right and done with integrity and a purpose, crowdfunding should yield a return on investment. Street begging doesn’t yield any returns to the giver. It’s basically someone asking for money with no plans to do anything in return to compensate the giver. While there is nothing wrong with giving to the homeless or giving to someone in serious need, this should never be confused with crowdfunding. They’re not the same.

When you crowdfund, you’re offering to provide something of value to your constituency in return. The money that is given would go towards creating a product or service of value that would be beneficial to whoever you’re asking to fund you.

We’re All Entitled To An Opinion But Crowdfunding Rages On

Everyone has an asshole and everyone has an opinion. Of course, there will be different outlooks on crowdfunding and what it is or what it isn’t. However, there is no denying that it is a legitimate way of funding a project. When a bank loans money to a startup to get their business off the ground, is that begging too? Should businesses stop looking for investors?

This time instead of a business going to the bank to get a loan, they go to their customer base or fan base to get a loan. Or is “begging” only acceptable when you go to a bank to do it? The detractors feel that asking friends and family is more appropriate, but not actual fans and supporters. Making sense out of nonsense is never a fruitful endeavor, so as always, everyone is entitled to their own opinions. For the ones out there saying crowdfunding is begging, the lie detector says that is a lie.