The Hardware Startup

Chapter 8. Crowdfunding

When we use the term crowdfunding in this chapter, we’re talking about donation-based crowdfunding: when a group of individuals donate money, often receiving a reward in return, to help a project creator raise the funds needed to bring a product to market (as opposed to equity crowdfunding, in which a team fundraises from the public in exchange for equity, but we won’t be discussing that here). It’s difficult to overstate the impact that donation-based crowdfunding has had on driving the growth of the hardware ecosystem, particularly for teams producing B2C products. In addition to potentially generating enough capital to produce a first run of a product, crowdfunding enables founders to reach an audience of early adopters, grow community, validate a market, get customer feedback and product insights, and generate a substantial amount of buzz.

A crowdfunding campaign is often the public’s first exposure to your product and/or company, and it’s critical to get it right the first time. Running a successful crowdfunded hardware project will require you to plan and execute strategies for manufacturing, marketing, fulfillment (shipping, warehousing), customer service, returns…it’s a ministartup!

The Crowdfunding Ecosystem

Crowdfunding is a relatively new phenomenon. Most donation-based fundraising sites are only a few years old. They themselves are startups that are constantly refining their offerings, adjusting their terms, and developing new ways to serve ...