By Imran Mukati (www.ownyourhollywood.com)
Los Angeles, CA -- (ReleaseWire) -- 03/29/2012 --(**UPDATE** SENATE AND HOUSE HAVE PASSED THE BILL!!)
In the past decade the Internet in general, and more specifically social media, has served to shrink the world. Geographical, language and cultural barriers that once seemed impassable are now conquered with the tap of a button on a keyboard, as global classrooms put Portuguese and Japanese students in the same virtual room and an African warlord’s crimes become an international scandal overnight.
The same trend, then, should come to bear in the newest and most dynamic application of social media -- crowdfunding. As new crowdfunding sites pop up and businesses and creative projects become reality because of contributions from a global marketplace, the collaboration of investors from every corner of the world has never been more expedient. In Cape Town, South Africa, an award has been established for the development of crowdfunding technology that can help African entrepreneurs. A new social media platform called IDEAME is dedicated to collecting the best crowdfunding ideas throughout Latin America. A Chilean video game called Pewen Collector, inspired by the Mapuche tribe, is an IDEAME success story and has currently launched.
International crowdfunding is certainly an enticing possibility, but as more extensive and diverse projects are launched to would-be investors every day, proponents of the growth of global collaborative investing need to acknowledge the successes and drawbacks of doing business in the world’s crowdfunding community.
For anyone wishing to act globally, the growth of crowdfunding platforms -- and the increasingly creative uses of the crowd’s resources -- has resulted in a dynamic partnership between innovators and their markets. Take the pristine Yasuni National Rainforest in Ecuador, which was threatened when an oil reserve was discovered underneath it in 2007. A crowdfunding initiative to protect the land raised $116 million by the end of 2011, with further fundraising efforts ongoing. One top crowdfunding platform that specializes in global diversity, Indiegogo, has helped fund a breadth of projects that includes a liver transplant in the Congo, emerging musicians in Australia and the production and marketing of a 3D consumer printer in the United Kingdom. In countries like Ireland and Australia, indigenous crowdfunding efforts have united to create a nationwide trend toward supporting creativity and entrepreneurship.
Of course, like anything peppered by new challenges as it grows, the globalization of crowdfunding has some unique obstacles. The laws governing investment crowdfunding, for instance, vary from country to country and often make funding across international lines impossible. The U.S. Senate has sought to address this problem with a bill called the “CROWDFUND Act,” which adds measures to the JOBS Act to allow SEC-approved crowdfunding platforms to seek contributions from smaller investors. As investing law seeks to keep pace with the burgeoning crowdfunding trend, some would-be investors have been hobbled by legal limitations that keep the boundary lines intact. As lesser developed nations with looser economic guidelines jump on the crowdfunding bandwagon, investors are likely to gravitate toward startups and creative ventures with fewer restrictions and an easier road from concept to reality. Consistent crowdfunding guidelines across national borders might be an impossible dream, but the more countries fall in line the more a true global marketplace can begin to take shape.
Every few months a new nation seems to shape its own crowdfunding identity -- Australia, the UK and Ireland have each become collectors of crowdfunded success stories. But another drawback in the global picture of crowdfunding is the fact that smaller, poorer nations lack the resources to make their voice heard in the crowdfunding community at large. And the trend is still tilted towards the United States and a few other nations like Australia -- Kickstarter is the world’s largest crowdfunding website but it still only sets up accounts for American initiatives. The Unreasonable Institute, an initiative that offers 6-week mentoring fellowships to social entrepreneurs around the world, has experienced the disparity between developed and undeveloped nations firsthand with its Marketplace project. Through Marketplace, crowdfunders can contribute to the accounts of Institute fellow finalists, but some 85 percent of the contributions come from donors the entrepreneurs know, putting worthy finalists like Narcisse Mbunzama, a former child soldier from the Democratic Republic of the Congo who has launched a company to aid farmers called Mobile Agribusiness, out in the cold. In the first 15 days of the crowdfunding drive, three American finalists raised $10,000 each. Mbunzama only raised $70.
With an estimated $2 billion a year raised by crowdfunding, the vision of spreading those dollars and the resulting big-ideas-made-reality around the globe is certainly one to be pursued. With consistent crowdfunding legislation, equitable platforms, and the recognition of the rich potential lying untapped in less visible nations, crowdfunding can become a global phenomenon with the power to unify and enrich the world. (http://ownyourhollywood.com)
To learn more about the author please follow on Twitter @imranmukati or visit www.imranmukati.com
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Our other articles on crowdfunding:
The Crowdfunding Bill Just Might Save Entrepreneurship
Crowdfunding Successes Offer Hope for Creative Ideas from Entrepreneurs