Monthly Archives: July 2018

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Understanding The Concept Of Crowd Funding

Expert Author Norah Achayo Amboko

Just as the term suggests, crowd funding is basically a way used to raise money by simply asking a multitude of people to each chip in a small amount of money towards a given cause/project such as disaster management, political campaigns, civic projects and Start-up Company funding among others. This type of funding principally employs the use of the internet whereby an individual seeking to obtain funds for a given cause/project sets up a webpage where they put up a profile for their cause and essentially tries to get people (mainly through social media) to contribute towards the said cause/project. Crowd funding is not only limited to individuals as companies also use it to obtain funds through the sale of minimal amounts of equity to different investors.

The concept is attributed to Joseph Pulitzer; a newspaper publisher who in 1884 urged the American public through his newspaper; New York World to contribute towards the Statue of Liberty's pedestal after the American Committee for the Statue of Liberty ran out of funds for the same. Since then, the concept has since momentum with the first online initiative occurring in 1997 when American fans of the Marillion rock band raised about $60,000 via the internet to enable the band play in the United States after they were unable to go on tour due to lack of funds.

Types of crowd funding

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