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Sorry, maybe my post wasn't clear. In the sense of giving money over to someone else for the achievement of a goal, I would see 3 basic categories: 1) A donat

by brk 13y ago

Sorry, maybe my post wasn't clear. In the sense of giving money over to someone else for the achievement of a goal, I would see 3 basic categories: 1) A donation, however phrased. In this sense, you are effectively giving money away with no expectations of any future returns of any sort. It would be for the most part "anonymous", or at the very least trackable only for the purpose of eventually allowing the recipient to say "thanks". 2) A pre-paid product purchase. In this case you're effectively combining the elements of the "group buy" concept that at least at one time was semi-popular on Internet forums (8 years ago a group of F-150 enthusiasts all got together to purchase Gaylord brand fiberglass bed covers. Standard price was $1600, IIRC, but by committing to purchase 25 units all at once, we were able to purchase them for $1200 shipped). In this case you realize that the product delivery will occur at some future date, and that you get your money back/don't have to pay if the goal is not reached. If this goal IS reached, you fully expect to receive the advertised product within a reasonable timeframe. 3) An investment. In this case you are not looking for a product, per se, but you believe the corporation has the potential to make money. Your investment buys you a share of the company, and therefore a share of future value as well. Investments carry risk, and your investment could also become worthless, or worth less than the investment amount. Kickstarter seems to mostly attract people looking for #2 above, and most projects have some very low tier to accommodate people who only want #1 above. I'm not saying the project owner can't or shouldn't turn a profit, I was just saying that the project backers don't ever receive any part of that profit, so they are not "investors" (a term which Kickstarter seems to purposefully avoid".

genericuser 13y ago
I would say investment is the closest of your 3 categories to describe Kickstarter. Although not by your definition of investment which is quite narrow, in that it only involves investing in companies for a share of ownership. You give them money which has a potential return (the reward). They anticipate the return to be as described, frequently a slight discount to a good on a certain date. This return is very rarely estimated accurately as with most returns. Usually it is at least incorrect in the date estimate, sometimes the retail price price winds up being lower than the kickstarter price, and sometimes it exceeds the estimate and you get something like a free sticker too. You are assuming risk with your money for that potential gain, that is the trade, like an investment just your money is a tiny amount, your risk somewhat mitigated, and your gain tiny.
- brk 13y ago
  Interesting perspective, I hadn't thought about it that way, but I like your logic.
colechristensen 13y ago
>I was just saying that the project backers don't ever receive any part of that profit, so they are not "investors" Of course, I don't think anyone is mistaken to think backing a kickstarter project is an investment. What you are buying with a project backing isn't the product, but a good-faith effort to complete the project. One might think kickstarter is a store, but it isn't and doesn't claim to be. Backed projects come with rewards, but they also come with an implicit and obvious 'if successful' caveat with the clear implied risk of failure.

by brk 13y ago

genericuser 13y ago

I would say investment is the closest of your 3 categories to describe Kickstarter. Although not by your definition of investment which is quite narrow, in that it only involves investing in companies for a share of ownership. You give them money which has a potential return (the reward). They anticipate the return to be as described, frequently a slight discount to a good on a certain date. This return is very rarely estimated accurately as with most returns. Usually it is at least incorrect in the date estimate, sometimes the retail price price winds up being lower than the kickstarter price, and sometimes it exceeds the estimate and you get something like a free sticker too. You are assuming risk with your money for that potential gain, that is the trade, like an investment just your money is a tiny amount, your risk somewhat mitigated, and your gain tiny.

brk 13y ago
Interesting perspective, I hadn't thought about it that way, but I like your logic.

colechristensen 13y ago

>I was just saying that the project backers don't ever receive any part of that profit, so they are not "investors" Of course, I don't think anyone is mistaken to think backing a kickstarter project is an investment. What you are buying with a project backing isn't the product, but a good-faith effort to complete the project. One might think kickstarter is a store, but it isn't and doesn't claim to be. Backed projects come with rewards, but they also come with an implicit and obvious 'if successful' caveat with the clear implied risk of failure.