Crowdfunding


Crowdfunding refers to a type of financing in which a variety of Internet users provide money for a specific project. Example include the financing of start-ups or art and music projects.

General information[edit]

The first crowdfunding project was started by Brian Camelio in 2003. With ArtistShare, musicians were to have the chance to finance an album through supporters without being tied to a record label. Crowdfunding is a relatively recent phenomenon in Germany, but even so, there are quite a few successfully funded projects such as film productions.

Crowdfunding takes advantage of the potential of a broad mass of people, as is the case with crowd testing and can be categorized with crowdsourcing. The principle is that each person from the crowd provides a relatively small amount of money and receives a return in the form of shares, goods or payouts based upon the project’s success. The transactions are handled on a crowdfunding site on the Internet, where the project is first introduced. Usually there is a minimum contribution per supporter and a general minimum threshold that must be achieved so that the project can be started.

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1. Silent participations (lending-based): The donor contributes their amount to the project, but does not have the right to participate in decisions, etc.

2. Rewards (reward-based): The donor receives rewards in the form of goods, services or first purchase rights.

3. Immaterial values (donation-based): The donor makes a donation, but gets no tangible return.

4. Shares (equity-based): The supporter acquires shares in the company. The funding amounts are, as a rule, much higher. This is usually referred to as equity crowdfunding.

SEO aspects can be of importance to the borrower. When a project is launched, usually a website will also be created for it or a specific platform will be used to present the idea. All SEO tricks of the trade can be put to use in order to attract the greatest possible amount of people and especially crowd funders. Being found by a search engine when a specific term is entered is the first step that prospective supporters take to find out about a project.

SEO aspects, such as what keywords have been selected and understandable text with relevant contextual information, show the search engines what it is all about. The text markup, for example, with headings and clean programming of the website are important signals for search engines. Off-page aspects cannot be dismissed out of hand either. Activity in social media, recommendations on blogs or backlinks through business partners and reputable media can bring a project to the top of the search results, whether it is a website or crowdfunding page.

Web Links[edit]