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Study aims to better understand crowdfunding for the business community

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Study aims to better understand crowdfunding for the business community

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Crowdfunding platforms have proved pretty revolutionary in their channeling of finance to worthwhile projects throughout the world.  The number of platforms has mushroomed over the past few years, with a huge range of ventures of various sorts obtaining funding that they might have struggled to obtain through other channels.

The implementation of the Jumpstart Our Business Startups (JOBS) Act was supposed to make it easier for more established businesses to use crowdfunding as a means of raising finance for their ventures.  A particularly prickly issue was the way projects would advertise themselves.  Historically this has been illegal, so a major part of the JOBS Act was to legitimizing the advertising of funding campaigns via search advertising, social media and so on.  It allows these young, prospective companies to advertise via social media, email, a sign on a street corner – anywhere, really – as long as the funds are invested through a crowdfunding portal.

So what have the implications of this been on the crowdfunding community?  Has it heralded a shift in the kind of organizations and projects that are seeking financial support?  A new study between Crowdnetic and UC Berkeley hopes to find out.

The pair have collaborated together previously on the Program for Innovation in Entrepreneurial and Social Finance, which is a leading research center for emerging alternative financial models, crowdfunding and how they apply to innovation, entrepreneurship and social impact.

If you haven’t heard of Crowdnetic before, they provide technology and market data to the crowdfunding industry.  As such, they’ve collected a good deal of data on how the crowdfunding market has changed since the JOBS Act was altered in September 2013.  They’re teaming up with UC Berkeley to analyze that data to see if any trends have emerged, both in who is seeking funding, where they’re seeking it from, and how much they’re raising.

The project will be headed by Dr Richard Swart, from Berkeley, who helped US officials explain the changes brought about by the JOBS Act to the marketplace.  Crowdnetic CEO Luan Cox explained the possibilities of this new collaboration.

“We are beyond thrilled about this partnership with UC Berkeley,” she said.  “We have followed Dr. Swart’s work and have seen him emerge as a crowdfunding expert in academia.  We are excited to contribute to his research and could not be more pleased about the opportunity to work with him.”

Certainly one to watch with interest.

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