Cloud Funding

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Crowdfunding has a long history with several roots. Books have been crowdfunded for centuries: Authors and publishers would advertise book projects in praenumeration or subscription schemes.

The book would be written and published if enough subscribers signaled their readiness to buy the book once it was out.

The subscription business model is not exactly crowdfunding, since the actual flow of money only begins with the arrival of the product.

The list of subscribers has, though, the power to create the necessary confidence among investors that is needed to risk the publication.

War bonds are theoretically a form of crowdfunding military conflicts.

London's mercantile community saved the Bank of England in the 1730s when customers demanded their pounds to be converted into gold - they supported the currency until confidence in the pound was restored, thus crowdfunded their own money.

A clearer case of modern crowdfunding is Auguste Comte's scheme to issue notes for the public support of his further work as a philosopher. The "Premiere Circulaire Annuelle adressée par l’auteur du Systeme de Philosophie Positive" was published on 14 March 1850, and several of these notes, blank and with sums have survived.The cooperative movement of the 19th and 20th centuries is a broader precursor.

It generated collective groups, such as community or interest-based groups, pooling subscribed funds to develop new concepts, products, and means of distribution and production, particularly in rural areas of Western Europe and North America. In 1885, when government sources failed to provide funding to build a monumental base for the Statue of Liberty, a newspaper-led campaign attracted small donations from 160,000 donors.

Crowdfunding on the internet first gained popular and mainstream use in the arts and music communities.

The first noteworthy instance of online crowdfunding in the music industry was in 1997, when fans underwrote an entire U.S. tour for the British rock band Marillion, raising US$60,000 in donations by means of a fan-based Internet campaign. They subsequently used this method to fund their studio albums.

In the film industry, independent writer/director Mark Tapio Kines designed a website in 1997 for his then-unfinished first feature film Foreign Correspondents.

By early 1999, he had raised more than US$125,000 on the Internet from at least 25 fans, providing him with the funds to complete his film.In 2002, the "Free Blender" campaign was an early software crowdfunding precursor.The campaign aimed for open-sourcing the Blender 3D computer graphics software by collecting $100,000 from the community while offering additional benefits for donating members.

Indiegogo's logo.

Crowdfunding started to gain mainstream traction with the launch of DonorsChoose (2000), GlobalGiving (2002), and ArtistShare (2003).

As the model matured, more crowdfunding sites started to appear on the web such as Kiva (2005), IndieGoGo (2008), Kickstarter (2009), and Microventures (2010).

The phenomenon of crowdfunding is older than the term "crowdfunding". According to wordspy.com, the earliest recorded use of the word was in August 2006.