The Millennial generation is increasingly interested in crowdfunding, an alternative financing system that allows members of the public to invest in a pitch before its completion. Many small companies have already caught onto this trend, and are using digital platforms to fund start-up and independent projects. However, crowdfunding isn’t just about getting a project completed. It opens avenues for large and small companies alike, allowing them to source new customers, market products and pre-order sales. It seems that when crowdfunding is involved, everyone gains.
Crowdfunding was originally conceived to support the financing of small companies. It offers an enticing alternative to companies who are looking to think outside of the box, while attracting a younger and Internet savvy crowd. The adoption of crowdfunding has the potential to completely change the current workplace. As technologies continue to develop, the digital skills acquired by young Millennials contribute to their advantage. According to Telefonica UK Chief Executive Ronan Dunne, by 2025, 75% of the UK workforce will be made of Millennials. As the baby boom generation slowly fades out, Millennials will carry the key workforce.
There are several reasons to adopt an alternative financing system such as crowdfunding. The Millennials’ jaded perception of the current system, predominantly its commercialisation, acts as a major incentive. Many view larger scale marketing processes as artificial and insincere; something that the personal nature of crowdfunding attacks head on.
Crowdfunding platforms allow individuals, small companies and larger corporations to run a campaign that offers a transparent story: connecting suppliers to consumers, and companies to their backers. Potential backers can contact companies directly through crowdfunding platforms to ask questions about the project and ensure they are investing their money in a worthwhile company. For Millennials, this connection is very important. 30% of Millennials believe they will not need a bank account in the next fifteen years. Not only is this due to a loss of faith in the current banking system, but also a belief in alternative financing. They are counting on alternative finance to overhaul the banking system.
The digital revolution has allowed individuals and small companies to be innovative in completely new ways, from mobile devices and operating ecosystems to social media. Crowdfunding platforms not only provide financial support for those who need it, but they encourage a community of followers too. By engaging with people who will potentially become your backers, you can listen to their comments and receive helpful feedback to continue to expand and grow your company. Like we’ve said, when crowdfunding is involved, everyone gains.