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I think the author is overlooking one very important thing. Crowdfunding for startups or small business isn't only about the financial return. Yes some people a

I think the author is overlooking one very important thing. Crowdfunding for startups or small business isn't only about the financial return. Yes some people are going to put $100 into a company claiming to be the next facebook thinking they'll be rich. However, many, many more people will invest in these companies to be a part of something or support their friends and families etc. All of the satisfaction isn't derived from the return. That being said, protecting investors and maximizing their likelihood of return is going to be largely about the platform. What kind of deals do they facilitate? How do they vet? etc. The next year is going to be very interesting, and I'm excited to see how this pans out, especially because I'm one of those guys working on a crowdfunding platform.

_delirium 14y ago
I agree on motivations, but if that really is someone's motivation, can't Kickstarter already handle that? You put in your $100 just to help out and support your friends/family, and in return you get some swag or recognition or future product, but not an equity stake.
- cube13 14y ago
  Kickstarter only allows projects that have a tangible end. They don't allow projects that have non-concrete goals like "make a business" or "hire people".
- littlegiantcap 14y ago
  The problem with that though is the equity stake is an important piece of the puzzle. It may seem a little paradoxical, but by giving out an equity stake you're reinforcing the non monetary social rewards as much as the monetary ones. Not to say of course that the money isn't important because it is, but my point was there is many kinds of "rewards" an investor receives. Money is just one part of the equation.
- rprasad 14y ago
  Kickstarter is essentially a form of prepayment triage: if enough people want to pay for your product in advance, you get the money to make the product. Crowdfunding is simply cash for equity. The investor is not getting a product, so the Kickstarter model does not work.
  - littlegiantcap 14y ago
    Don't forget securitized debt!

_delirium 14y ago

I agree on motivations, but if that really is someone's motivation, can't Kickstarter already handle that? You put in your $100 just to help out and support your friends/family, and in return you get some swag or recognition or future product, but not an equity stake.

cube13 14y ago
Kickstarter only allows projects that have a tangible end. They don't allow projects that have non-concrete goals like "make a business" or "hire people".
littlegiantcap 14y ago
The problem with that though is the equity stake is an important piece of the puzzle. It may seem a little paradoxical, but by giving out an equity stake you're reinforcing the non monetary social rewards as much as the monetary ones. Not to say of course that the money isn't important because it is, but my point was there is many kinds of "rewards" an investor receives. Money is just one part of the equation.
rprasad 14y ago
Kickstarter is essentially a form of prepayment triage: if enough people want to pay for your product in advance, you get the money to make the product. Crowdfunding is simply cash for equity. The investor is not getting a product, so the Kickstarter model does not work.
- littlegiantcap 14y ago
  Don't forget securitized debt!