Investopedia defines crowdfunding as the use of small amounts of capital from a large number of individuals to finance a new business venture. Following is the story of how Brad Damphousse and Andrew Ballester used their crowdfunding platform to become success stories.
Essentially the opposite of the mainstream approach to raise capital for a business, crowdfunding depends on the collective resolve of family, friends, customers, and individual investors rather than auctioning the business idea to a limited pool of wealthy individuals or institutions.
The best of two worlds—crowdsourcing and microfinancing, crowdfunding is not only changing how businesses raise capital, but it is also transforming how people support companies. Truth be told, crowdfunding is a test of a person’s persuasive skills. To raise capital worth thousands, you need to persuade individuals who may be your family, friends, customers, or even strangers to cough up $10, $50, $100, or more to support your project or business venture.
Today, we are witnessing a proliferation of websites offering the crowdsourcing facility. The best known among them are Kickstarter, Indiegogo, and GoFundMe. While all three websites are used to raise capital, they differentiate in the events they support. Kickstarter focuses on creative projects like art, music and films. Indiegogo accommodates many, diverse campaigns while GoFundMe is a crowdfunding platform designed for individuals and personal causes.
While Kickstarter and Indiegogo are used more for crowdfunding purposes, GoFundMe can be used to raise funds for a wider range of events, which is the reason billions of dollars have been raised so far on the GoFundMe platform. As you will find out soon, the story of GoFundMe and its co-founders: Brad Damphousse and Andrew Ballester, is anything but disinteresting.
The History of Crowdfunding, Indiegogo, Kickstarter, and GoFundMe
Before we dig into the success story of GoFundMe and its co-founders Brad Damphousse and Andrew Ballester, let’s take a quick look at the history of crowdfunding, Indiegogo, Kickstarter, and GoFundMe to see how it all started.
Ask most people about the birth of crowdfunding and they’ll zero in on 2008—the year Indiegogo was launched. It was the first and probably the largest crowdfunding platform in the U.S. However, these people are limited in their knowledge of crowdfunding and its origins. Contrary to popular belief, crowdfunding did not start with Indiegogo, instead its roots can be traced back to the 1700s when Mozart—the most prolific and influential composer of the classical era, offered invitations and manuscripts in return for donations to fund his concert.
Fast-forward a few decades and we find Joseph Pulitzer successfully using The New York World newspaper to raise capital of over $100,000 for the base of Statue of Liberty in 1984. From 1884 to the turn of the twentieth century and beyond, crowdfunding was used on many occasions to finance a project or raise money for business. However, the world had to wait until 1997 to see the birth of modern day crowdfunding. This was the year when a British band named Marillion raised funds for a reunion tour using crowdfunding.
The funding raised by Marillion inspired Artistshare—the first dedicated crowdfunding platform to emerge in the year 2000. The first funding campaign on the platform raised $130,000, which inspired other crowdfunding platforms. From 2000 onwards, the crowdfunding industry grew bigger and better each year.
The first major breakthrough for crowdfunding as we know it today came in 2008 with the launch of Indiegogo—an international crowdfunding website founded by Danae Ringelmann, Slava Rubin, and Eric Schell. Two years on, crowdfunding revenue tripled from $530 million in 2009 to $1.5 billion in 2011.
Indiegogo is not the only company deserving the credit for the increase in crowdfunding revenue from $530 million in 2009 to $1.5 billion. Kickstarter—a crowdfunding platform launched in 2009 and GoFundMe—a crowdfunding company founded in 2010, also deserve mentions. Currently, Kickstarter is the world’s largest funding platform for creative projects.
Launched in 2009, Kickstarter was named as one ‘Best inventions of 2010’ by Time magazine. While the company launched amid little fanfare, it has managed to receive an estimated $3.8 billion in pledges from July 2012 to August 2018. Additionally, it has launched more than 412,494 projects since its inception.
However, the biggest and most popular crowdfunding platform today was launched in May 2010 by Brad Damphousse and Andrew Ballester. GoFundMe has been a major success in every sense of the word. So far, the platform has helped raise funding of more than $5 billion. Additionally, the company generated revenue of over $100 million in 2016. So, how did GoFundMe get to this point?
The Success Story of GoFundMe and Its Co-Founders Brad Damphousse and Andrew Ballester
With over 50 million donors to date, GoFundMe is the most popular online crowdfunding platform today. GoFundMe is the fastest and easiest crowdfunding platform to use whether you’re looking to raise cash to start a business, get your car fixed, or pay for college tuition. Today, the company is worth millions of dollars. The co-founders of GoFundMe: Brad Damphousse and Andrew Ballester made this possible by building the business largely around fund raising for charitable and other causes.
GoFundMe leverages social platforms such as Facebook to find a user base that is prepared and willing to make small and large donations to people who are struggling. Often, the nature of viral social media allows these fundraising campaigns to raise much more than what the fundraiser originally thought was possible.
Founded in San Diego in 2008 by Damphousse and Ballester, GoFundMe competed against Kickstarter and Indiegogo for the right to be crowned as the most popular crowdfunding website. In 2015, a few years after its launch, GoFundMe saw investments of an undisclosed amount of money from Accel Partners, Technology Crossover Ventures, and Stripes. The transaction meant that the investors took a majority stake in the business and that two co-founders had to step down from their positions as the owners of the company.
At the same time, GoFundMe was valued at $600 and the company was estimated to be generating $100 million per month in funding for the campaigns using its platform. In 2017, GoFundMe acquired Crowdrise—a for-profit crowdfunding platform that raises charitable donations.
Winning “Best Workplace in Technology 2017” award, the success story of GoFundMe and its co-founders Brad Damphousse and Andrew Ballester is ongoing and fun to watch.
by Bobby J Davidson
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