Brazilian Crowdfunding
This article will give you an outlook of the crowdfunding practices in Brazil, that have become an option for small businesses who want to start working on a project, but do not want to deal with banks' high interest rates.
Background
A practice that has become more and more common in countries like USA, crowdfunding arrived in Brazil in 2009 through the website Vakinha, that worked as a network to raise funds for relatives' and friends' projects.
Vakinha is not restricted to businesses and projects, it also includes personal matters such as plastic surgeries or the purchase of a brand new car, as long as the user is able to convince that he/she really deserves it.
Following the success of startups, the initiative is a significant incentive not only for small businesses and young entrepreneurs, but for any person who has a project in mind.
Successful Players
Inspired by the success of the American Kickstarter and the Brazilian Vakinha, Catarse and Movere are now the main crowdfunding websites in Brazil.
In only one month, Catarse collected BRL 14.500,00 and so far, 1475 people supported the projects displayed on the website. It is important to clarify that Catarse chooses projects based on their creativity and not on the profit. There is nothing wrong if the project was developed to generate profit, but it must have a creative format.
In this sense, the majority of the projects are the artistic ones, such as those related to cinema, literature and arts. Projects that do not necessarily have an artistic format have, for sure, a very creative or even artistic content.
Every project must offer a reward, however, it can not be monetary. Projects related to music, for example, let their sponsors give opinions about the tracks selected to the album and even to the content of the lyrics. So the projects are not investments, but legitimate support to the arts and creativity, as the supporters really feel part of it.
As a proof that the funding of the projects does not aim to generate profit, most crowdfundings in Brazil do not accept monetary rewards. They believe that rewards should provide remarkable experiences or a genuine thank you rather than material gain.
Here are some of the main crowdfunding websites in Brazil and their projects' profile:
- Catarse – arts, especially cinema, dance, music and literature.
- Vakinha – focused on personal matters and donations to institutions.
- Movere – very similar to Catarse, focuses on art projects.
- Benfeitoria – projects focused on accessibility, culture, education, music and fashion.
- Queremos.com – the website finances foreign events, especially concerts.
Tendencies and Crowdsourcing
A concept still not so popular in Brazil is the one of crowdsourcing. In this model, instead of looking for funding for a project, the participants look for professionals that could help them with the development of their projects.
In Brazil it is very common to have subcontractors doing certain jobs. Such practice involves all sorts of services, from cleaning to translation. This pattern has started to change with the advent of crowdsourcing.
It works like this: an entrepreneur has a certain project to develop, but does not have the workforce, so he/she publishes the project on a crowdsourcing website, estimates how much he/she is willing to pay and those who are interested on working on that project send their proposals. The entrepreneur gets to evaluate the ability of the professional before having to choose who is going to work on that project.
Both crowdfunding and crowdsourcing stimulate creativity as the person gets to perform a professional job without necessarily being a professional. It valuates talent, innovation and experience more than educational degrees.
It also puts aside the traditional Brazilian mentality that still tends to valuate more a professional with an extensive education degree than an experienced one. It may also constitute an increasing on the number of liberal professionals in Brazil.