The purely financial traction is changing, and investors are wanting to have an exchange of goods, ala Kickstarter, or see an impact for their investment. But even this is not a clear split.
There is a division of high net worth individuals using Crowdfunding as an investment tool, in return for an equity share, and potential tax breaks depending on your jurisdiction. And, the others, who can be uncomfortable with the term investor. They are looking for projects they support, that match their values, or grab their attention – similar to a chocolate bar at the super market checkout. From small tickets to a couple of thousand, these ‘others’ are driving change and voting with their pockets, from small amounts to several thousand. The profile of projects on crowdfunding is changing.
So what does this mean for web3?
Web3 has seen a dramatic rise of crowdfunding platforms, mostly in niche areas: fashion, gaming etc, and this makes sense.
Why?
Web2 often have a dark backend, in that a group of individuals have all the control. We have no access to decide the rules of engagement, who gets promoted for funding and can change criteria at any time. This has to change. The few deciding on our future need to change. A transparent, community voting perspective is what works with crowdfunding, and this is exactly the strength of web3. Crowdfunding only works if you have a pool of companies looking for funding and a pool of individuals who are interested in ‘investment’. By making the community vote for the companies to get promoted on the crowdfunding platform, and using web3 FinTech in the background, there is full transparency of criteria, financial costs, and no hierarchy.
What does the future hold?
More community identified projects that have social impact or niche focus getting the funding that they need. A change from only Unicorns receiving funds, improved access to funding for companies who have real solutions, that already have a customer based within the web3 community. Its a win-win really.