You might have already heard about how people are using crowdfunding to raise money. Oculus Rift, which was sold for billions of dollars to Facebook, was the first real commercial virtual reality platform. And it started off among a group of virtual reality enthusiasts who were discussing how to build their kind of virtual reality headgear on a crowdfunding platform like Kickstarter. They raised $2.4 million from Kickstarter and later on, it was sold to Facebook for $2 bn.

Can one create such success stories within an enterprise itself? Many people may have an idea in their minds for their enterprises but lack the market research, proper support, and the resources required to develop it. One can groom entrepreneurs in the workplace by launching a solution like Enterprise Crowdfunding. According to Forbes, Crowdfunding refers to the “practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet”. When crowdfunding is practiced within an organization or an enterprise, it is known as Enterprise Crowdfunding.

How does this new method of crowdfunding work? It can be either an internal enterprise crowdfunding or external enterprise crowdfunding. In an internal enterprise crowdfunding, anyone, particularly an employee who has a new idea, can submit a proposal and take the initiative of sharing his/her innovation with fellow employees to gain their support. Using an intranet crowdfunding platform, the proposer of the idea can specify a target amount required to develop the concept further and the period in which he/she hopes to raise this amount. By also mentioning the benefits that the supporters and investors of the proposal would receive if the required funds are received in time, the proposer will be able to encourage them further to support it. Thus, helping members of the enterprise can invest in the idea and contribute the required resources for the development of the project. Like other forms of crowdfunding, participants of internal enterprise do not use their money but use a portion of the allocated company budget. Employees invest in the ideas they think would be most valuable to the business on a promise by the company that fully funded ideas (by crowdfunding) become real projects.

While enterprise crowdfunding is a relatively new idea, many companies have already adopted it in their business practices. Researchers from IBM recently created ICF (Intranet Crowdfund), an innovative intranet-based crowdfunding application for crowdfunding inside an organization.[i]

Using external enterprise crowdfunding, brands can build awareness and engagement with the current audience or even tap on new ones. GE Appliances launched FirstBuild[ii], a co-creation community where people can work alongside GE designers to build crowdfunded projects or use the physical ‘microfactory’ space to develop their projects. Hasbro has run crowdfunding challenges using its Gaming Lab to source game ideas from the general public and bring them to life.

Key Takeaways 
By Enterprise Crowdfunding – internal or external, the potent ideas can be turned into real projects and brands can build awareness and engagement with the current audience, or even tap on new ones.

[i] https://www.researchgate.net/publication/262255982_Crowdfunding_inside_the_enterprise_Employee-initiatives_for_innovation_and_collaboration

[ii] https://firstbuild.com/