What is Internal Crowdfunding? The Most Engaging Way to Innovate
Consumer ‘crowdfunding’ platforms like Kickstarter are changing the way individuals and organizations discover and fund new ideas.
Here’s how these platforms typically work: Entrepreneurs, writers, artists, musicians, and inventors describe an idea or product they want to build, and consumers make a commitment to invest in the idea. If the idea or product receives enough money—a “tipping” point—it is considered funded, and people’s credit cards are charged for the amount they committed (and usually get some reward for their contribution amount in the form of an early product release or other product swag).
Internal crowdfunding through our Cultivate Ignite application uses that same model inside your company in a different way:
INSTEAD OF... an open market of ideas... EMPLOYEES IDEATE for the good of the company.
INSTEAD OF... people using their own money to fund project ideas... THE COMPANY GIVES employees “house money” to invest.
INSTEAD OF... a participant receiving something material in return... EMPLOYEES GET to fund their colleague’s ideas, their own ideas, and have an opportunity to work on whatever is funded.
The value proposition: inspire your people, uncover great ideas
Internal crowdfunding provides a "signal" on what matters most. Consumer crowdfunding is so valuable for the entrepreneur because it generates a signal about what products and services people are willing to spend money on. Companies need a similar signal about what idea investments will make the organization more innovative, efficient, and financially successful.
It creates transparency in the resource allocation process. Cultivate Ignite is a platform that gives everyone a voice in investment decisions. This creates transparency and credibility in the investment and resource allocation process. It inspires people to submit ideas because they now have a clear channel for getting feedback—it doesn't just go to upper ranks and into a black hole.
Best of all, it's a positive cultural change! Through internal crowdfunding, you are entrusting people with the power to decide which ideas would be most valuable to the company. This engenders passion in the organization’s products and services—now, everyone has “skin in the game.”
You might also be interested in: Best Practices: Cultivate's Roadmap to Guide Your Funding Round and What Problem Does Internal Crowdfunding Solve and How Can I Use It?