Crowdfunding for businesses has proved to be profitable various small and large companies. Big tech companies like IBM have realised the need to use crowdfunding for improved interaction and innovation. Companies exercise crowdfunding for three primary reasons: internal use, market research and external use.
IBM introduced crowdfunding in 2012 which was to be used internally by the over 350,000 employees globally. The aim of the project was to encourage innovations by employees, which are utilised for the benefit of the enterprise. The kind of crowdfunding used by IBM does not allow individuals to fund their projects, but rather for their colleagues. When crowdfunding is used in such a way, it improves morale and participatory company culture, better executive decisions and better engagement between the employees and the community.
Large corporations like Sony have implemented crowdfunding in their business for the sake of conducting market research, rather than the money factor of it. The use of this strategy by enterprises helps in finding the products which are in high demand and capitalising on them to increase market share. It also eliminates the need to use million of dollars for building projects as it is easier to determine which products need to be produced in large quantities as figured out for the market research via crowdfunding.
Some enterprises like Johnson and Johnson focus more on using crowdfunding for external use. The projects conducted are open to the public and uses their experts to vet them. Johnson and Johnson focus on improving public health which is a grand strategy of having interested individuals and institutions showing their support towards the good course through funding. This kind of crowdfunding improved engagement between enterprises and the community and serves as an excellent method of showing support and giving back to the community while sensitising them of your products.