Crowdfunding In India: All You Need To Know

Posted on 26 June, 2015 by Team Wishberry

Crowdfunding India
The concept of crowdfunding has been around, surprisingly, since the 18th century. It can be traced as far as to the early 1700s when poet Alexander Pope decided to have his translated works of Homer’s Iliad crowdfunded in exchange for what we’d today call shout-outs and creative collaborations with the masses. In 1783, Mozart adopted a similar approach in order to perform three of his concertos in a Viennese concert hall. And though he failed in his first attempt (see? Even the legends fail!), he tried again a year later and succeeded! Almost a year later, a crowdfunding campaign for one of the most iconic structures came underway. Americans, French and people from various parts of the world (upwards of 12,000 people), pitched in their money for a pedestal for the Statue of Liberty to stand on. Cut to 2009. Kicktstarter is founded in the US, giving the dreams of creative individuals in the country a new lease of life.
Today, millions of projects in the United States of America have seen the light of the day thanks to a strong backing from the community in exchange for simple yet fun and exclusive rewards.

Today, the crowdfunding industry is estimated to be a $95 billion dollar industry, with rewards based crowdfunding taking up and dominating with 43% of the share. It also stands to be the fastest growing model today. In 2012, Wishberry comes to India and creates a similar storm. However, if you think that the concept of crowdfunding is fairly new in India, you might want to think again. 600 years ago, mystic saint and troubadour from South India, Arunagiri Perumale sought the crowd’s help to have his manuscripts written. In 1976, Shyam Benegal raised Rs. 2 lakh from 500,000 farmers, for Manthan, a film by Amul.

Crowdfunding today In India

Since 2012, there has been a wave of crowdfunding that has taken over India. Although, it has a long way to go, today we have a platform that caters to every kind of project. To classify, there are three main types of crowdfunding: 1. Rewards-based crowdfunding, where a project creator (campaigner) raises funds for his/her project from backers in exchange for rewards instead of monetary profits. 2. Equity based crowdfunding, where an individual raises funds from many investors in exchange for a stake in the business. 3. Donation based crowdfunding, where one simply seeks funds out of charity and nothing is actually offered in return. The bifurcation above pretty much makes it clear that not every kind of project works on any kind of platform. For instance, a startup seeking crowdfunding will not necessarily work on a rewards based platform, the same a music video project won’t work well on a donations based platform. This stems from two reasons- a. it’s not exactly viable for an innovation-based project to share the same space as a social cause, b. each platform attracts a very specific kind of audience, which may work for one type of project, but may not for another.

The Effect of Crowdfunding

Crowdfunding essentially relies on the idea of democratizing the flow of money into a project. Not all ideas (especially the ones in the creative sector) have much scalability, thereby failing to seek funding from hardcore investors and venture capitals. Does that, however, mean that they shouldn’t ever see the light of the day? Obviously, not. Crowdfunding takes the power of selection from the elite few and places it into the hands of the many- the community, the ones who actually care about a project. Although India is beleaguered by technological issues and lack of awareness about this sector, creative projects now need not be stuck in the idea stage permanently anymore. The surge of crowdfunding in India has forced creative individuals to step out of their comfort zones and chase their dreams wildly with a club. It’s a lease of life for those who are constantly battling with maintaining creative freedom unto themselves and producing quality work without selling out. The more than 200 projects across different creative genres and a community of about 10,000 backers alone stand testimony to the fact that crowdfunding has arrived in India and is here to stay.

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