These 5 Parties Benefit From the Surge in Crowdfunding

Crowdfunding has continued to grow over the years and the benefits of this multi-billion dollar industry are experienced by millions of people around the world. And while it used to be a niche market with very limited reach, it’s now a massive industry with considerable influence.

The Growth of Crowdfunding

Over the past few years, there has been tremendous growth in the crowdfunding industry. According to the Massolution 2015 crowdfunding report, the global industry grew by 167 percent in 2014 to reach $16.2 billion. In 2015, the industry more than doubled again, reaching $34.4 billion.

Much of the industry growth is thanks to huge spikes in volume in Asian countries (320 percent growth rate). More growth is expected in 2016 and beyond in Asia, Europe, and the United States.

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Who Benefits from Crowdfunding?

As the crowdfunding industry scales, it becomes more and more interesting to watch how growth affects those inside and outside the industry. In particular, keep your eyes on the following groups, as each benefits from crowdfunding.

  1. People With Health Problems

First and foremost, people in need benefit from crowdfunding. While we’ll discuss the value of equity crowdfunding in some of the following sections, it’s important that we highlight the role crowdfunding is playing in with medial hardships.

When it comes to medical hardships, Plumfund is one of the leaders in connecting those in need with generous donors. At the time of writing this article, there are currently more than 8,000 campaigns on the site, with thousands of dollars in contributions being given to fund things like liver transplants, cancer treatments, medical expenses, and more.

When money goes toward helping people receive the medical treatment they need to live, it’s hard to argue that any other group benefits more from the generosity of crowdfunding than these individuals.

  1. Charities and Non-Profits

Because crowdfunding relies on the generosity of donors, it’s the perfect match for charities and non-profits. Crowdfunding allows small organizations that are typically restricted to a geographical radius and/or limited contact list to suddenly gain access to thousands, or even millions, of potential givers. This opens up an entirely new set of opportunities for these groups to raise funds for the causes they support.

  1. People With Minimal Savings

The majority of people do not have sufficient savings to survive catastrophic life events – or even an extended retirement. For those with meager lifetime earnings, something like a natural disaster that wipes away their home can leave them without a place to live. This is where crowdfunding comes into play.

With crowdfunding, people who find themselves in the midst of difficult financial circumstances can reach out for help. Those with resources can then rally around them and help them find stability.

  1. Startups and Entrepreneurs

By the end of this year, one study estimates that equity crowdfunding will surpass venture capital as the number one funding mechanism for startups. Naturally, this means entrepreneurs are benefitting a tremendous amount from the growth of crowdfunding.

  1. Business Investors

If so many investors are pouring money into equity crowdfunding, then there has to be some benefit on their end – right? With crowdfunding, investors suddenly gain access to a much wider selection of startups they otherwise wouldn’t have known about. This gives them the opportunity to grow their portfolios and hedge risks.

Don’t Underestimate the Value of Crowdfunding

Crowdfunding isn’t some flash in the pan that a select few individuals are benefitting from. In reality, millions of people from all walks of life are extracting value from this incredible internet-based social funding option.

Melissa Thompson writes about a wide range of topics, revealing interesting things we didn’t know before. She is a freelance USA Today producer, and a Technorati contributor.