Got an idea for a new product but haven't tracked down enough serious investors yet? Why not just ask the great multitude of strangers online to front you the dough? Sounds crazy, but this notion, better known as crowdfunding, took off like a rocket in 2012.
Kickstarter, the best known of the crowdfunding platforms, has been around for more than three years now, but this was the year projects like the Pebble smart watch and Ouya game console raised millions of dollars on the platform. In fact, the growing number of multimillion-dollar crowdfunding campaigns have all happened in 2012.
Crowdfunding isn't just for cool new tech, though. Charitable causes like building a museum devoted to Nikola Tesla, Hurricane Sandy recovery, and sending abused bus monitor Karen Klein on a much-deserved, half-million-dollar vacation also raised big bucks online this year.
But this is just the beginning. So far, crowdfunding is only donation-based in the United States. If you chip in to a Kickstarter campaign, the most you can hope for is a warm fuzzy or cool gift in return (and some of the gifts are pretty darn cool, like your own Ouya console).
This will all change when a new law gets SEC clearance and goes into effect. It will allow anybody to invest in startups and other projects through crowdfunding platforms in return for an equity stake.