By PAUL O’SHEA
Sr. Technical Editor
Electronic Products Magazine
Crowdfunding is nothing new — we can trace its roots to the 1700s and probably long before that, depending on how you define the term. New Yorkers who know their local history can point out that construction of the Statue of Liberty was partially underwritten by donations from people around the world. Some have said that modern day crowdfunding began in 1997 in a very different business than you might expect — music — when Marillion, a British rock band, funded its U.S. reunion tour with online donations.
Different types of crowdfunding have emerged over the years, some for charities, political groups, real estate, and for small entrepreneurial start-up companies. You may remember that Kickstarter, which launched in 2009, was the first to help entrepreneurs of all types raise funds for projects. Just as importantly, the JOBS (Jumpstart Our Business Startups) Act was signed into law in 2012 to allow equity funding and to make it legal for private companies to publicly solicit funds. Simply put, it reduced the regulation burdens on small businesses to raise money.
Indiegogo helps entrepreneurs get access to funding
However, something big happened a couple weeks ago that has put crowdfunding on the fast track from concept to customer. Global distributor Arrow Electronics and crowdfunding platform Indiegogo announced a strategic alliance to create a groundbreaking crowdfund-to-production platform for entrepreneurs, IoT companies, and enterprises using crowdfunding for social validation and innovation acceleration. That changes everything because people with product ideas can now access the engineering prowess, tools, and development services of Arrow via Indiegogo. It changes everything because you, the individual engineer, don’t have to go begging for help with your chip selection, board layout, and probably most importantly, getting access to manufacturing support. This is a first between an electronic device distributor and individual designers. See Senior Technical Editor, Dylan McGrath’s video interview of Matt Anderson, Chief Digital Officer of Arrow Electronics, and David Mandelbrot, CEO of Indiegogo.
Part selection, production and manufacturing are the strengths of Arrow Electronics.
This type of funding has been offered in a limited way by large technology companies, but the startup companies would be limited to using that company’s resources. To be fair, that’s usually not much of a shortcoming to a beginner because the mega companies have significant technical prowess. This new agreement opens the design opportunities to everything that’s out there. I suspect that Arrow and Indiegogo will have the semiconductor manufacturers lining up to get first dibs for providing solutions.
Maybe this works for everyone because Arrow and not the semiconductor companies will assume the initial risk. These entrepreneurs are the incubators for getting new ideas off the ground and they need help in areas in which they typically don’t have expertise: production and manufacturing. Looks like this is a win-win situation, and therefore, we will probably see other distributors forming similar partnerships.
(AspenCore, which owns Electronic Products, is a wholly owned subsidiary of Arrow Electronics.)
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