Crowdfunding in Nigeria - Literature review Example

According to Hemer (2011), crowdfunding has been defined as the process that involves making an open call through the medium of the internet for provision of the financial resources. These can take the form of rewards in exchange for some form of voting right or equity in the organization. Hemer (2011), further argues that although crowdfunding was in existence in the late 1990 and was largely used on the internet, it was limited to get funding for activities in the creative industries that included the making of videos or film Publishing by independent writers and journalists other people in the theatres, visual arts, and games.

However, the development in recent times brought by the invention of new tools like Web 2.0 and social media and networking sites have contributed to the use the viral networking and marketing (Lee, DeWester and Park, 2008). This has attracted a huge number of people into some web communities that are of interest to them within a very short time (Crowdsourcing.org. 2012). Although crowdfunding has only attracted scholarly investigation in recent times, the concept is an old age one that has been practiced in some societies.

An example of early application of crowdfunding is seen in the building of the Pedestal for the statue of liberty. This statue was established in1884 by Joseph Pulitzer, who had made an open call to the people in America to provide the micro-donations to fund the project (pritts, 2010). Online funding is otherwise a new concept that is has been greatly boosted by the development of Web 2.0 technology (Lee, DeWester, and Park, 2008). This has resulted in the establishment of more crowdfunding platforms that inspired even more people to participate in a project that they feel passionate about.   Lambert and Schwienbacher (2010) indicate that the current advancement in technology has increased the communication between the entrepreneurs seeking funding and the investors providing the funds.