A new business model is surfacing — one in which the customers play a critical role in a company’s success: as investors. This business model isn’t an idea. It’s happening today. Right now.
Sellaband: This site centers on allowing music artists to post up to three songs. Customers, then, have an option of investing in the band. Once the band gains enough capital, sellaband assists the band in producing an album. Once released, any revenue the album makes is shared by the investors.
Sellaband’s mission is, “To unite Artists and Fans in an independent movement that aims to level the playing field in the global music industry.” They’ve done a great job in accomplishing this mission.
The music industry was once a very interesting beast. Before the internet, the thought of indie artists was laughable. The only way to be taken seriously was to land on a high-end label. Without that big label, you’ll never get distributed to more than fifty people.
Technology flipped this ideology on its head.
It will be interesting to see how this business model applies to other sectors: venture capital, angel investing, investment banking and hedge funds.
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Def check out spot.us for a great example of crowd funding.
Here’s a first take on how crowd funding could be applied to venture:
http://www.ventureexaminer.com/venture-examiner/2009/5/26/crowdsourcing-venture.html