Crowdfunding: The next big thing
Want to make a music album? Organise a painting exhibition? Supporting a cause? Whatever it is that your heart desires, here’s the latest on how to raise money – crowdfunding. Vibha Singh has the details.
Many a time’s good projects with social message don’t get attention because of lack of finance. Be it a Marathi short film Ling Bhed highlighting the issue of prenatal sex determination followed by abortion, divorce and murder in case the unborn is a girl or Bionsense, a Mumbai-based medical technology company, which have successfully collected money for their venture. The success stories are many.
As per reports, last year close to 25 per cent IITians voluntarily chose not to participate in campus placements. They all had plans to start up their own ventures. After studying from the US, Vasuda Sharma did not want to pursue a job; rather her dream was to come up with her own album with 11 songs featuring 30 musicians from different parts of the world. In the latter case, she did not have any source to collect over five lakh rupees which she needed to record her album independently. But she had heard of Kickstarter, one of the largest crowd funding websites.
She started looking for a crowd funding platform in India and got to know about Wishberry, a crowd funding platform in India that help Vasuda and many like her collect funds from multiple sources. Crowd funding is a process where people help an individual, a cause, start up through collectively contributing money, showing support to the project. In return they are promised a certain reward or recognition or in some cases, a stake in the venture.
The phenomenon, which so far was only popular in the West is now becoming quite popular in India. It is reportedly estimated that in 2014, crowd funding shall add more than 2,70,000 employment opportunities in the market globally. This industry is all set to grow at the rate of 92 per cent in the current year and a study reveals that over the period of five years it has grown in leaps and bounds already.
With new projects going live daily, it’s a chore to keep up with, let alone find, interesting genre project. Varun Sheth was an interest rate swap trader at ICAP before he co-founded Ketto with bollywood Actor Kunal Kapoor to raise funds for social causes and NGOs across India. Talking about the increasing popularity of crowdfunding, Sheth said, “The idea is very simple – to connect people who have money with those who need money. Fundraising is a very difficult and time consuming task and that’s the problem that we wanted to solve. I, myself, being a finance professional realized that for example, people who are starting up need a capital, of say 50lakhs or 1crore and we saw that an online platform like Ketto was the best way to do it mainly because more and more people in India are coming online and more and more people are willing to take up risks (and start-up), so the initiative came up in terms of creating an online network where we could connect both these sets of people.”
The rising trend in the use of this platform owes greatly to the public’s choice in the matter. People contribute to projects that they’re passionate about and projects that have no fan base, generally, never take off. Companies and individuals all around the world have started making more and more use of this phenomenon especially those from the entertainment industry. Sheth said , “It is simple you upload your dream project on a crowdfunding website, explain why it is important and how much money you need. When people read about your project and are convinced about it, they can chip in with as much money as they want. It is fast developing into an alternative for investor-based projects.”
Why is there hope for crowdfunding in India? Seth feels that India being the one biggest countries for Non Government Organisations (NGOs), crowdfunding stands a big chance. “Lot of new platforms are going to come in the next few days,” he says. Many colleges and even individuals will push students to list causes on crowdfunding platforms, he says.
With independent projects catching up in the industry, Sarthak Dasgupta, a Mumbai-based film maker joined the crowdfunding club. After his debut, The Great Indian Butterfly, Dasgupta marketed his project on Catapoolt, raising Rs.8 lakh within three months. “Crowdfunding is not just about raising money. It is also about marketing to the right audience and gaining traction even before a project is started,” he says in an email interview.
Catapooolt which specialise in the entertainment sector – music, movies and performing arts was started by Satish Kataria, managing director and Yogesh Karikurve, associate director.
In the field of music crowdfunding began in the mid-90s and India’s independent music circuit seems to be catching up. Through crowdfunding websites such as artistshare.com and wishberry.in, events, albums and even music videos are now being funded by fans. Not only individuals are using it to garner funds, but it being also used as a promotional tool. Vasuda says that music composers like Vishal Dadlani contributed for her album after they saw the pitch video online. Vasuda said that it gives you the experience and offers liberty to shape project the way you want.
In India, founders of these platforms have discovered their way to crowdfunding in many ways. For example, the 20-something founders of Wishberry, Priyanka Agarwal and Anshulika Dubey, started their venture as an online wedding gift registry in 2010, where friends of people getting married could crowd-gift presents to the couple. They then extended this to Mumbai marathoners wishing to crowdfund money for charity (Rs 4 lakh for Teach for India in 2011 went up to Rs 40 lakh for a variety of organizations in 2012), then extending it to other spaces in April 2012.
“Crowdfunding is the way of the future. It really puts the power in the hands of the fans. Essentially, the process can be compared to managing a Facebook fan page or a LinkedIn business page. You have to tend to it daily, make your offers exciting, evaluate and target the right donors or investors, create a buzz around your product and chop and change strategy if the need arises.,” says Siddharth Shetty, founder and CEO of Fundlined, an online fund raising enterprise modelled after American crowdfunding platform, Kickstarter.