Crowdfunding is forcing venture capital outside of the Silicon Valley bubble
Kickstarter projects are having real impact, according to a new study.
The success of crowdfunding platforms and projects completed through those platforms has helped to expand investment by venture capitalists outside Silicon Valley, University of California — Berkeley and Yale University researchers found.
When Kickstarter projects in areas of the country that don't see interest from venture capitalists succeed, investors seem to become more interested in those parts of the country. Successful crowdfunding campaigns attract VC interest both to the people running campaigns outside major tech hubs and to those parts of the country in general.
Crowdfunding and venture capital across the United States.Credit: UC Berkeley"VCs are demanding successful crowdfunding campaigns as proof," said study author Lee Fleming, faculty director of the Coleman Fung Institute for Engineering Leadership at UC Berkeley. "It's almost like a market test when they're looking at potential investments."
A 1 percent increase in the number of Kickstarter campaigns in a region in one year predicted a 0.097 percent increase in venture capital interest the following year, the study found.
The study focused on Kickstarter and did not include other crowdfunding platforms. Within Kickstarter, researchers honed in on the campaigns — mainly tech projects — that would be of interest to traditional Silicon Valley investors. They discounted Kickstarter's many arts-centric crowdfunding campaigns, like ones to fund the making of a film.
The study also pared down VC investments to small investments in early-stage companies that would be most similar to crowdfunding initiatives. Researchers eliminated areas of investment, like biotech, that cannot be funded on Kickstarter.
"As [crowdfunding] has gained legitimacy and entrepreneurs have learned how to use [crowdfunding] platforms, it may increasingly become a complementary source of funds to VC," the study's authors wrote in an article in the journal Science.
This research hasn't yet answered a few remaining questions: Are there particular types of VCs who are paying attention to crowdfunding? Within the category of tech, are particular crowdfunded projects getting attention from investors?
But it has shown that crowdfunding has the potential to make investment more accessible to Americans outside the Bay Area.
"If these trends continue, the rise of [crowdfunding] may not only fund more innovation in a more diverse set of places but also expand access to VC and other forms of finance in these same regions," the authors wrote.
"All regions and all people have ideas, and crowdfunding is enabling those people to get some funding for those ideas," Fleming said. "After they develop successful ones, they become candidates for VC investment."
Featured Video For You
Hand-powered centrifuge costs only 20 cents, can diagnose diseases
(责任编辑:产品中心)
- Scientists detect water sloshing on Mars. There could be a lot.
- I have spent YEARS designing the iPhone 9 and I am mad as hell
- Cute grandparents are devoted to 2 things: Each other and In
- Kid who can't handle being grounded for a day overreacts like only a 9 year old can
- 'Terminator Zero' creators find fresh life in sci
- The local version of Project 2025 is already causing devastation.
- Upcycling technique turns plastic bottles into supercapacitor material
- Novel cathode ticks the boxes for a cobalt
- This student's hilariously bizarre campaign video escalates so damn fast
- Pakistan Cricket at crossroads after shock defeat at Pindi
- Ted Cruz’s speech gave anti
- Download this: Why Facebook's app looks so different
- 山水相依新村美 产村相融业态丰
-
Understanding Relational vs. Non
Relational databases and non-relational databases primarily differ in the types of data they store a ...[详细] -
华南农业大学到从化开展智能农业培训_南方+_南方plus日前,华南农业大学电子工程学院人工智能学院)教师团队,“梅州振声现代农业装备永根科技站”与“广州从化智慧农业永根科技站”主要建设人员前往广州从化 ...[详细]
-
The Apple Watch Series 3 is here, has cellular connectivity, and is kinda boring
The big event Tuesday is giving us many Apple reveals: some large, some not so much. Falling squarel ...[详细] -
Twitter quietly fired a suspected Saudi Arabian spy, report says
We've all seen what can happen when nefarious interests weaponize a social media platform like Twitt ...[详细] -
Wordle today: The answer and hints for August 27
Can't get enough of Wordle? Try Mashable's free version nowOh hey there! If you're here, it must be ...[详细] -
Revealed: The famed, mysterious, new Apple campus toilets!
The new Apple campus is supposed to represent the absolute pinnacle of contemporary design. Especial ...[详细] -
Pompeo calls for collective efforts to safeguard Strait of Hormuz: Seoul official
US Secretary of State Mike Pompeo on Tuesday called for collective efforts to safeguard the Strait o ...[详细] -
"World's fastest electrodes" triple the density of lithium batteries
French company Nawa technologies says it's already in production on a new electrode design that can ...[详细] -
24 of the Oldest Trees in the World
These trees have remained firmly rooted for centuries, in some cases millennia. The oldest among the ...[详细] -
今(10)日,由雅安日报传媒集团、雅安市广播电视台、茶马古城共同举办的“三雅”文化传承与发展高峰论坛在茶马古城隆重举行。来自文学艺术界的资深专家、相关部门领导和各级媒体齐聚一堂,借助论坛之力,丰富“三 ...[详细]
- 2016's $400 GPU vs. 2019's $400 GPUs
- Mango diplomacy: Pakistan to explore new markets
- Silicon arches boost structural integrity of high
- Mars might hold enough oxygen under its surface for life
- 中山古镇:到苏炳添家乡看“村BA”,来一场说走就走的美食之旅
- Trump likens N. Korea talks to 'beautiful game of chess'
- Cute grandparents are devoted to 2 things: Each other and In