The Nation | Srettha Thavisin | December 6, 2013

At 66 stories tall mixed-use building, the BD Bacatá, raised over $145 million from more than 3000 people who have invested in a share in the building.

For those who are not familiar with the term, crowd funding technically means "the use of small amounts of capital from a large number of individuals to finance a new business venture".

In the past, so-called crowd funding revolved around getting funds from traditional circles of owners, relatives and venture capitalists. But with the arrival of social media and connected online networks, it has become much easier for online marketplaces to start to match people who need capital with those who have capital to invest.

To explain it a bit further, typically most crowd-funding platforms revolve around an all-or-nothing system. People share or post ideas or projects on the portal sites, providing information on ideas and amount of money needed to potential investors, and if a project fails to appeal and reach its target, then pledged amounts are cancelled.

The platform has become very popular within societies with high entrepreneurial spirits. Last year the leading crowd-funding site in the United States, Kickstarter, raised US$145 million (nearly Bt4.7 billion) for pledging projects.

What if someone seizes Kickstarter's model and tries to apply it to property development? Is there any possibility that the idea will materialise?

Typically, crowd-funding projects involve pledges of capital to develop simple consumer products from anywhere in the world that are shippable to each individual investor once manufactured. But what about pledging capital to support and develop something that is static and takes years to complete?

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Another challenge is finding a group of people who have a vested interest in getting what they want but who don't individually have the resources to get a multi-unit project, with its economies of scale, off the ground. It is not only that it's very difficult to find and match people with shared visions, but it's also hard to find people who are committed to seeing a project through to completion. That can test the patience of donors accustomed to seeing projects reach goals in weeks, rather than the years it can take for a project to go from plan to realisation.

While many people are attracted by the idea of property development, accepting the risks and committing the time and money to executing on the idea are not for everyone.

Still, there have been recent examples of exploring the idea of applying a crowd-funding platform to property development in the West.

At 66 stories tall, the mixed-use residential/commercial building, BD Bacatá will be the tallest skyscraper in Colombia, with a colossal price tag to match. However, instead of relying on one developer to finance the $240 million project, a group known as Fidi Global has pushed a different model for the skyscraper: to have Colombians fund the building themselves. After an extensive advertising campaign on billboards, radio, and TV, more than 3,000 people (see the video above) have invested in a share in the building and raised over $145 million so far.

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