Remember the recession in 2009?
It put millions of people out of work, toppled governments, and stagnated economies. With unending lines of people queuing for jobs, and the need to place food on the table, a new breed of “accidental entrepreneurs” saved the day.
Indeed, according to the highly regarded Ewing Marion Kauffman Foundation, “Rather than making history for its deep recession and record unemployment, 2009 might instead be remembered as the year business startups reached their highest level in 14 years — even exceeding the number of startups during the peak 1999–2000 technology boom.”
Where did these entrepreneurs get their funding? Instead of looking at traditional sources of financing, they got creative.
Many of them turned to the crowd. Internet crowdfunding is a direct result of the need of entrepreneurs to ﬁnd new ways to fund their dreams. Online crowdfunding platforms, an emerging method of capital formation, plays a critical role in the growth and acceleration of innovation.
I reviewed the salient points about this new financing model in the book The Planet Entrepreneur: Guide to Business Success Around the World, in which Steven Strauss invited members of the World Entrepreneurship Forum to detail our efforts in our individual fields of expertise. Our goal was to help guide people to become the next planet entrepreneurs.
The concept of crowdfunding, that is, drawing funds from a large community via the internet, is not a new one, but it is relatively new in the online arena. The first recognized Internet crowdfunding campaign was held in 1997, when U.K. rock group Marillion raised $60,000 to support its U.S. tour. Since then, many crowdfunding platforms have raised funds for startups and SMEs.
The trend of entrepreneurship is now focusing, and rightly so, on ecosystem integration, education, and capital formation. I believe that the capital formation coverage that our firm, The Soho Loft, provides can help fuel entrepreneurial growth and innovation. Crowdfunding as an alternative financial tool empowers entrepreneurs not just to raise capital but also to gain word-of-mouth traction for their product and services and turn users into advocates.
In the book, I discussed how this new financing model is needed to power the global entrepreneurial revolution that Inderjit Singh refers to in one chapter, and the entrepreneurial technological transformation happening around the world, which Nikhil Argawal explains in another part of the book.
With financing just a click away, the entrepreneur has now become the new global adventurer, according to Colin Jones. Thais Corral, with Jarrod Russell and Danielle Cesano, exhort entrepreneurs to be green in business, and change the way of doing things. Tony Meloto, of the non-profit Gawad Kalinga, also says that ordinary men and women, when given the chance, will be empowered to change their lives. He plays a part in this by helping them build decent homes and small businesses rather than just offering charity. Jeannie Javelosa shows how to empower women to become entrepreneurs, while Jack Sim focuses on the untapped potential at the base of the pyramid.
Baybar Altuntas welcomes entrepreneurs in the borderless world where new financing is available, while Fadi Sabbagha discusses social media as a game changer. Anna-Lena Johansson highlights the paradigm shifts in education and Nicolas Shea focuses on creating an entrepreneurial ecosystem.
Laurel Delaney shows how to grow business globally in this digital age. Finally, Steven Strauss caps The Planet Entrepreneur by highlighting “intrapreneurship” and the self-employed entrepreneur. The book guides readers aspiring to be global entrepreneurs who desire to make a difference in their community.
If you are one of those entrepreneurs who want to gain something more than financial wealth then join the movement. Be a global solver through entrepreneurship by meeting the world’s problems with creative and practical solutions. Crowdfunding is one tool that you better have on your side; understanding and appreciating its potential strengths and weaknesses will work for you in the long run.