Imagine you are in a band, The Von Nerds. The group has written 15 songs, and is ready to make its first album. In the old days, you and the other band members might scrape together the cash to pay for a few days in a professional recording studio. But it would be risky—there is no easy way to estimate how many albums The Von Nerds could sell, or how much of the initial investment you could recoup through sales.
With crowdfunding, The Von Nerds has an opportunity to raise money and better understand fan support in advance of recording. It reduces financial risk, and helps to set a realistic estimate of available resources. ...