Crowdfunding for big brands: is this a trend?

By Vinicius Maximiliano, corporate lawyer, accounting manager and financier

 
Talking about the future within the internet market movements is always a great challenge, for obvious reasons: the first is precisely the innovative dynamics that can create, without any precedent, market trends never explored before. The second is precisely in the essence of the network, that is, its disruptive unpredictability in changing, in an intense way, traditional sectors. I particularly believe that crowdfunding (collective financing) is found in this second reason.
 
If we look carefully, the growth of crowdfunding platforms (sites) has become exponential in the last 2 years. The growth in the number of projects across the country, on the other hand, grows daily, on a geometric scale, as entrepreneurs, idealists and creatives decide to seek in the crowd, the inspiration and validation of their business ideas, products or social projects.
 
The expansion of platforms that intend to enable the opening of startups (also called “equity crowdfunding”) signals a shortcut to traditional market barriers, such as credit, market research, consumer audiences and fast financing at low cost. And in this field, Brazil still has plenty of room to grow!
 
But while we are still trying to define our main action niches in crowdfunding, and we are waiting for some minimal regulation in the sector, countries where crowdfunding operations are more mature are already beginning to dictate the trends of this market that grows to an incredible 60% per year. Major global players are already articulating new market approaches, business formats and expanding the scope of financing by the crowd, which will certainly arrive in Brazil soon.
 
To paraphrase Murilo Gun, in his considerations about entrepreneurship, rather than looking for new markets, it is to create markets, and thereby “fatten up one's pizza” so that you have a bigger slice of it. This pun may seem simplistic, but it clearly indicates the movements of crowdfunding platforms around the world.
 
One of the recent news, and which is certainly not yet being observed by most companies in Brazil (especially the big ones!), Is the creation of specific services, within the crowdfunding sites, for large corporations.
 
It sounds slightly contradictory, since, in general, large companies have enough money, professionals, laboratories and developers to create their products, finance production and launch without the need to use third-party business intermediaries, such as websites today.
 
However, think carefully about the most valuable asset that crowdfunding platforms have, and that large companies, no matter how big and more consolidated they are, depend heavily: market validation on the product (in other words, consumers!) . It cannot be denied that crowdfunding platforms have a wide and varied range of users who receive all projects. Those same users, if motivated, will finance the potential products ... but it doesn't stop there! These financiers are giving a message to the market: we like the product, we want to buy it and we are going to publicize it, which means: success!
 
And large corporations, along with their cashiers, depend on this commercial validation so that millions are not invested in a launch that could be a total market failure, as we have seen in recent history. Any new product, more than being new and well done, needs to be "accepted" by the market ... and this power is being concentrated in the hands of crowdfunding platforms. And they are finding a way to monetize that.
 
Added to this new format, comes a proposal for more targeted, robust advertisements and analysis of the project data differentiated for large companies. Despite this, the platforms that released this new format, claim that the projects will follow the same path as any common project on the website, and will be “tested” by the public as if it were a common project… with only one big corporation as a difference as owner. In addition, of course, the sites can offer these companies all of their team and expertise in services in advertising and market work, very specific to the crowdfunding segment, and which has often been neglected by traditional corporate marketing departments.
 
In a more technical analysis, having some major brands prospecting projects within the crowdfunding sites can go a long way towards increasing the credibility of both the site and the company itself. In addition, other projects within that platform will indirectly benefit, since large companies bring new potential funders to their projects, many of which did not integrate the dissemination database.
 
Apparently, adopting their own means for big brands to start using crowdfunding to validate their new products, seems like a cheap and very safe way to allow paradigm breaks for these corporations in the face of a more dynamic consumer, who wants more respect, more proximity, and less induction. And that brings together the big guys and the big big innovators ... who in the end will be their direct competitors, if they don't change their market focus.
 
As you can see, apparently it is a good win-win negotiation that appears in the crowdfunding market! This has a positive impact on a sector that is proving to be one of the few alternatives for young ideas and national companies, and which have excellent ideas in their hands, but little financial potential. Who knows, with the entry of some large companies, the sector consolidates even more and is increasingly attractive to financiers?
 
Vinicius Maximiliano Carneiro, corporate lawyer, accounting manager and financier, is the author of the work "Dinheiro na Multidão" - Oportunidades x Bureaucracy in the National Crowdfunding. The online book is available on the website http://viniciuscarneiro.adv.br/.