Crowdfunding Good, Crowdfinancing Bad

crowdThe rise of sites like Kickstarter, Indiegogo, Rockethub, Fundageek have successfully fueled the project dreams of artists, musicians, engineers and a plethora of other masters-of-the-universe.

Got the technology but not the funds to build a neurologically-engaged pillow that comforts the sleeper while providing high intensity dreams of succeeding as emperor?

These sites allow the project owner to profile and potentially receive funding to make their dream projects a reality. A lot of projects do not attract the necessary funding to move it forward, but some are successful and a few are wildly successful. Pebble Technology Corp sought $100,000 for their smart watch and ended up with over $10 Million in watch sales.

The interesting aspect here is not only the immediacy of the company’s success but the fact that this form of funding allowed the founders to garner all of the necessary capital for their company without parting with any ownership of their company. In a world where startup financing has nearly always demanded a trade of equity for risk capital, crowdfunding is a head-tilting, forehead-smacking, hair-pulling bit of brilliance.

… But like everything, nothing is perfect.

Read more at TechVibes

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