A brief explanation into the History of Crowd Funding
In the early 1990’s the onset of the World Wide Web enabled the very first online crowd funding campaign.
The internet provided a means of communication between communities by means of email, text messages, fan pages and newsletters. Proof that crowd funding is a great way to raise funds came from the rock band Marilion who approached their fans to provide the finance ($60,000) for the bands US tour in 1967 and for subsequent albums. The band recognised how a loyal and engaged crowd can be used as a powerful source of finance.
The very first platform arrives.
In the year 2000 the first platform arrived in the name of Artistshare. This was the first reward based crowd funding website for music, it was known as “fan funding” for musicians.
A new market emerged in the form of giving. New websites were popping up all enabled by the internet. One such site was Justgiving.
Micro lending emerged in the mid 2000’s, this meant that individuals could lend small amounts to help projects in the developing world. Kiva was one of these new sites.
Micro lending and peer to peer lending take off. In the UK and US peer to peer lending sites started to emerge. These sites allowed individuals in the developed world to lend small amounts of money to each other.
Late 2000’s To Early 2010’s
Peer to peer lending is now growing fast. P2P is now making its mark in areas which were previously dominated by the large and traditional funders. These areas included investing for equity in start-ups and lending to businesses.
Funding of public and social projects is another new area.
As of 1st April 2014 the industry will be regulated by the Financial Conduct Authority (FCA), taking over from the Office of Fair Trading (OFT). These can only but help the industry moving forward.