Poll: Should You Be Free To Crowd-Fund a Project You're Financially Capable of Funding Yourself?

March 20, 2014 - Andrew Eisen

Crowd-funding sites like Kickstarter and Indiegogo have been successfully used by many to fund projects they otherwise would not have been able to get off the ground themselves.

But what about individuals or organizations that don't need crowd-funded dollars for their projects?  What if they could easily afford to fund it themselves?  Should they be able to use crowd-funding sites too or should they pay for it their damned selves?  Should their be rules enforcing this?  Laws?

That's what this week's poll is about, folks.  Vote in the poll and let us know how you think Kickstarter and its ilk should be used in the comments below.  You can even send us email at SuperPACpodcast@gmail.com if you like.

EZK and I will discuss this topic and reveal the poll results on the next episode of Super Podcast Action Committee.

"vote label" © Tribalium / Shutterstock. All rights reserved, used with permission.

-Reporting from San Diego, GamePolitics Contributing Editor Andrew Eisen


Comments

Re: Poll: Should You Be Free To Crowd-Fund a Project You're ...

Ummm, let me see if I can sum this up...

Yes.

 

 

My only question is, why is this even a question?  Being capable of shouldering the cost alone certainly doesn't *obligate* you to.  As Davvolon said, maybe you don't want to risk that much of your own money.  Nothing wrong with that.  If you can convince enough people to share the risk with you, to bring the risk to a level you are willing to work with, then rock on.

Re: Poll: Should You Be Free To Crowd-Fund a Project You're ...

The premise of this question confuses me. Is there anything or any reason Warren Buffett can't pursue venture capital for a new project or business even though he could fully fund it himself? The advantage is that the risk is spread around so he wouldn't be the only one to lose out if it fails but the disadvantage is that he is now beholden in some way to investors, whether it's crowd-funding or serious venture capital. If you can afford it and are willing to risk all your money on it, go for it. But just because you can afford to do it, doesn't mean it will be a success, so by all means, share the risk-reward.

I guess my only problem with crowd-funding is that I fund it for $20/$50/whatever and all I get is the book/game/whatever. In all honesty, the risk-reward factor of crowd-funding is not really all that worth it for "investors." Now if there were some way for groups of investors to band together and contribute potentially small sums of money to a company in return for future earnings from that company, like the company is 'sharing' its profit with the 'shareholders'...but as far as I know, no such thing exists.

Re: Poll: Should You Be Free To Crowd-Fund a Project You're ...

It is not quite what you describe, but there are loan services where a larger group of people loan money to small businesses for whatever the businesses need. What they make back is the interest on the loan.

Here is an example one:

https://www.lendingclub.com/

But what you describe, making investments in exchange for equity, is actually illegal in the US. I believe it has been debated in the past, but has not materialized into law just yet. 

Re: Poll: Should You Be Free To Crowd-Fund a Project You're ...

One simple way to pay back the funders in a sense would be to let them get the game (or whatever) for less than the selling price if they help fund it. For instance, if a game might sell for $60 once it's released, early funders might be able to get it at the $40 reward level, netting an effective $20 savings if the project succeeds.

Re: Poll: Should You Be Free To Crowd-Fund a Project You're ...

I certainly don't think there should be rules against it.  Nothing wrong with "Hey, if you guys give us X amount of money, we will produce this content/product", regardless of the resources of the person proposing the project.

Now, the rewards for the people who support the project are the real sticking point, in my mind.  

I think it was someone here on GP who made the comparison that, in the case of a videogame kickstarter, offering a copy of the game for a certain level of support was pretty much like gauging interest in the game before producing it, and that those supporters would effectively just be pre-ordering the game if the kickstarter succeeded.

On the other hand, if a person/company with a ton of their own money starts crowdfunding for a for-profit project, and the best "reward" you can get is a thank you email, but you'll still be expected to buy the product, etc, then that's what I would consider more of a cash grab.

A proper balance of take and give is necessary.

Re: Poll: Should You Be Free To Crowd-Fund a Project You're ...

Any product based crowdfunding campaign that does not have a "get the product" tier is dead in the water. So I don't think there are any fears of a rich person doing what you describe.

Re: Poll: Should You Be Free To Crowd-Fund a Project You're ...

Also, if on KickStarter, it goes against their terms of use and the campaign would be shut down as soon as someone would spot it/report it.

 
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