/// Crowdfunding Market Nearly 10 Times Smaller Than Widely Cited Estimate

July 28, 2012  |  All Things Digital


Online crowdfunding, where regular folks shell out money to back a project or a company in return for rewards and sometimes equity, is pretty hot right now. And it’s set to get hotter when the U.S. JOBS Act goes into practice , which will make equity funding broadly available to unaccredited investors. But let’s not get ahead of ourselves. Felix Salmon at Reuters has a well-executed takedown of a widely cited global estimate for crowdfunding, which had pegged the market at $1.5 billion in 2011 , with the potential for $3.2 billion this year. This came from Massolution and Crowdsourcing.org , an industry organization focused on crowdfunding. Salmon parsed the Massolution report to find that it includes all sorts of things many people wouldn’t call crowdfunding — such as online charitable donations. The calculation also includes a generous more-than-doubling to allow for crowdfunding platforms that Massolution hasn’t accounted for directly. It turns out that the sliver of that massive $1.5 billion that can be attributed to crowdfunding for rewards and equity — you know, Kickstarter and Indiegogo and the like — is just $165 million

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Crowdfunding Market Nearly 10 Times Smaller Than Widely Cited Estimate


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