Crowdfunding Investments Estimated to Reach $3 Billion in 2012

I believe that I was like a great many others who when they heard the term ‘crowdfunding’ kind of pretended that I understood what it meant and then merrily went on my way without really giving it a second thought.

Then earlier this year I started running into a number of interesting products that were starting to get funding in that manner, starting with the Pebble watch. I find the whole trend very interesting and I think it’s a great boon to small developers who have great ideas but no expertise or experience in fund raising. It’s especially interesting to sports-related projects, since many of the developers of apps or devices are fans or enthusiastic athletes at heart and not necessarily business-minded as say, an investment banker or a Silicon Valley entrpreneur.

Now Venture Beat talks about how big this trend has become and estimates and where it is going and it is much bigger than I would have suspected. According to the piece which quotes a report from market research firm Massolution the industry raised $1.5 billion last year.

The research paper, called the Crowdfunding Industry Report also predicted that there was 1 million crowdfunding efforts over the course of last year and that $837 million came from North America. It breaks down the efforts into four basic categories: equity-based, donation-based, lending-based, and reward-based.

According to the report the market is expected to double this year. I know of at least two people considering heading this way for seed fund for their future developments and I am really fascinated by how this is all working out. You are also seeing a growing number of companies or sites seeking to be the home of a crowdfunding effort. There is Kickstarter, Crowdfunder, AppStori, and others are out there already.