Social media has changed many aspects of society but it is collaboration which is having the greatest impact. Crowdsourcing is a means to harness the power of the collective. To utilise the knowledge and (particularly as crowdfunding is concerned) the wealth of the crowd is empowering people in a way that could never have existed before social media.

In mainstream, traditional business finance, when you need to raise capital you go to a bank, an angel investor or a venture capital fund. With crowdfunding, the financing is highly distributed because you open up access to a much larger audience. This new model brings a number of distinct advantages:

    •    You have more people invested in your success and a correspondingly higher level of support.

    •    With a large number of small investors, it’s unlikely that any of them will expect to be able to control the way you operate.

    •    You create an opportunity for nonprofessional investors to put money into something they feel excited about.

    •    With a larger potential pool of funders, you have a better chance of actually raising the money you need.

Unfortunately, the disadvantages are that the old guard, being sidelined out of the operation and their cut, are resisting this new model and throwing up legal impediments. There are also issues with IP and, of course, with shark-like operators vying for a piece of this new territory.

There are many crowdfunding platforms operating in the UK, typically featuring video pitches on the site. If you’ve got a good idea and are looking for funding they might be worth investigating.