You may not know this about me, but I'm a documentary movie producer. As a huge documentary fan, my iPad is filled with them for travel—funding a movie was an investment in something I love. I've also backed products like a 3D doodler, an iPhone stand, and a cartoon about Paco the Judo Popcorn.
Sites like Kickstarter and Indiegogo have made it possible for everyone to be backers and for many a company to get off the ground. Today, it seems all we need is an idea and a catchy video to get the idea shared, and we're ready to get crowdfunded!
Here is why I fund projects:
- People I know, like, and trust have funded them first. I know this because I've linked these sites with my Facebook account, and they let me know whenever friends back projects.
- Projects interest me: documentaries, tech, nonprofits.
Some sites set a minimum amount that must be raised for the project to go ahead, whereas others send whatever money is funded along to the project owners. The idea of setting a minimum is to test the viability of the project: If the amount isn't met, you need to listen to that response from your market.
There are pros and cons to both ways of raising money. One interesting point to remember is that if potential donors' money is not returned for unsuccessfully funded projects, they may never donate again.1
In a very young industry of online crowdfunding, trust is still being built, and I think keeping donors happy is going to be critical in whether ...