This famous phrase, which, according to some sources, belongs to Ostap Bender, focuses on the idea that the prosperity of the local community depends mostly on the goals and actions of the community itself. Ie. the best ideas for overcoming poverty, improving the environmental status, social inclusion and others will be generated by local representatives. But implementation of these ideas can be accomplished through the support of the local community.
This approach to solving local problems is relatively unknown in Bulgaria. Usually, solving the problems of the local community is realized with the help of external experts with experience in the respective sphere. This approach almost excludes the possibility for local people to participate in the solution of a problem, initiative, etc. The model thus created creates a feeling of helplessness for the local community and a constant expectation of external support.
In recent years, there has been an interesting phenomenon in funding fresh and innovative ideas that can be widespread. This phenomenon is generally called Crowdfunding or literally translated into Bulgarian “crowd financing”. The idea is inventors, innovators or people with fresh ideas to offer their idea to solve a particular problem. The problem, the idea, the way of application, the possibility of “crowd” participation are presented on a specific platform or deliberately organized event. Presentation and timing of fundraising is called the Crowdfunding campaign. There are many good examples of successful projects, which in some cases raise even 200% more than the required funds.
This funding approach is extremely successful and is being developed through many platforms, with thousands of projects already funded globally. The combination of a challenge, the ability to solve a problem and the receipt of funding, provokes a huge interest in people with ideas. There is little interest in investors too, because even if it is high-risk, the venture can also be of very high return and, ultimately, this yield also covers loss-making projects. Training schools have also been set up on how to present the idea, how to develop and how to be sustainable, team building, and more. Crowdfunding has been so successful that some countries have even made changes to their legislation to legalize this way of financing. Even the European Commission has developed strategic documents on Crowdfunding and offers some funding opportunities for promoting or conducting training for Crowdfunding, more info:
The world’s largest and most popular platforms are Kickstarter and Indiegogo.
92 projects from Bulgaria have received funding from the Kickstarter platform.
For example, the Halfbike II project has raised a fund of $ 973,764.00 from 2,416 “Investors”. Of course, there are projects that fail to reach the required investment. All these projects can be found on the platform page. It is worthwhile for anyone wishing to use this fundraising method to explore, in addition to successful examples and failures, not to repeat any mistakes already made. Critical to success is the appropriate presentation of the project idea – good video, short and clear messages, good story, it is necessary to grab the attention of the “investor” within the first 15 seconds. It is also important to set realistic goals for the funds, ie. it is better to set a small goal and to reach than to set a high goal and fail. A good opportunity is through the platform to test an idea how it is perceived by people. Ie. the platform also provides opportunities for marketing research on the potential idea. Out of 92 projects, 16 were successful, or about 17%.
More than 100 projects have participated in the Indiegogo platform. This platform has fewer requirements on how to present specific projects that have their positives and negatives.
The success rate of Bulgarian projects is similar to that of Kickstarter.
In Bulgaria, they also operate local platforms that finance innovative ideas.
Some municipalities also create opportunities to fund social ideas. Even with a lesser amount of funding, there is a society and culture created to create projects to be funded by the Crowdfunding method. The advantages of such funding to grant schemes are that established businesses and firms are much more sustainable over time and have a significantly greater chance of success. The reason is that the company’s creator has to make a lot of effort to persuade many investors in his idea, if there are weak spots in the business idea they will necessarily be seen and indicated by investors. While a grant needs to be convinced of a small group of experts who assess the business idea not essentially but purely administrative.
Crowdfunding for now is a promising way to create successful businesses and really sift good ideas.
It is expected that this funding will continue to grow and be used more and more to create and support new businesses.
The contents of this article are the sole responsibility of the author, and can under no circumstances be regarded as reflecting the position of ALDA and the European Union.