The idea of internal crowdfunding came about when Jurgen Appelo was managing a large develoment team and tried to create an innovation committee that could filter the best ideas to move forward on new projects.

What happened was that the committee was becoming overwhelmed by ideas and could choose only a few. The employees were discouraged when they felt as if their ideas for the future of the company was being ignored. So the ideas stopped completely.

The role of management is not to select the best ideas, it’s to create a great system that allows the best ideas emerge.

Jurgen Appelo, Managing for Happiness

Internal crowdfunding is like a stock market innovation, allowing employees to bid on ideas they think are the best. Any employee may submit an idea, but she or he has to convince colleagues of their value. Teammates can vote, score or even get virtual money to bet on and choose the winners.