"If done properly," he said, "[crowdfunding] is the future of how small businesses in this country will be financed."
Anything is possible
The Queensland Literary Awards was one of 1903 projects launched on Pozible in 2012, of which 53 per cent reached their fund-raising targets. A total of $5.8 million was pledged through the site last year, giving year-on-year growth of 465 per cent. Globally, crowdfunding sites raised $US2.8 billion in 2012, according to an estimate by Massolution, a consultant in the space, double the level of 2011.
In the US, the leading crowdfunding site, Kickstarter, which launched in April 2009, raised $US145 million last year - more than the entire sum the US federal government spent through its National Endowment for the Arts agency. Over the past five years, Kickstarter has raised $US429 million; 89,049 projects have been launched through the site and 43.6 per cent have hit their targets. Its largest project to date is the Pebble smartwatch, which displays information pulled from a smartphone using Bluetooth, which raised more than $US10 million from almost 70,000 people last year. (The company offered the watch, which would retail for $150, to all those pledging a minimum of $115, effectively using Kickstarter as a pre-ordering platform.) Both Kickstarter and Pozible earn a 5 per cent service fee from successful projects (and nothing from unsuccessful ones).
Pozible's Crabbe says that while crowdfunding has been built on connecting musicians and filmmakers with capital, it will "move more mainstream" and to the point where anyone with a business idea will be able to turn to it to gauge its long-term viability. "I think we're still in the early days of a much bigger trend," he says.
Crabbe met Pozible co-founder Chen after advertising on the Gumtree website for a travel companion for a road trip from Sydney to Noosa. "As it turned out, we had common interests and decided we could benefit by working on a project together," Crabbe says. They created FundBreak in 2010, changed the name to Pozible and launched internationally in 2011. Its most successful raising is small entertainment company IRL Shooter, which crowd-funded a live-action, zombie-shooting game, Patient Zero, raising $234,000 in August. Online news site New Matilda also funded its relaunch through Pozible, raising $175,000 in late 2010.
Low barriers to entry and the potential of the market are encouraging other sites to enter the space. In the US, Indiegogo and RocketHub are well established, while in Australia, iPledg is still waiting for its first large project after launching in January 2012. Over its first year of operation, iPledg successfully linked 20 projects with funding, mostly for community and sporting groups and charities at around the $2000 level; the largest was more than $26,000. In its first year of operation, iPledg helped raise almost $100,000.
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