Nothing Like a "Kickstarter" to Get People Crowdfunding

Kickstarter has found itself at the epicenter of the groundswell with its crowdfunding platform being generated almost exclusively by its users.

So what is crowdfunding anyway? For those of you like myself who have very little experience with the groundswell, crowdfunding is a new financing practice where entrepreneurs (or anyone, really) can raise money from a large number of people (typically online) for a potential venture. 

Specifically at Kickstarter, regular people can peruse through hundreds of projects in 15 categories. If they discover a project that strikes their fancy, they can choose to become a backer and either contribute a donation or offer to pay a certain amount of money in return for a gift that is determined by the campaign creator. 

Watch the video below to learn more about the nuts and bolts of Kickstarter.

What we’ve learned so far is that Kickstarter is allowing the average Joe to become the fancy venture capitalist he’s always wanted to be. The site is user friendly AND its helping entrepreneurs make their dreams a reality. So far so good right? What could possibly go wrong with this type of app?

People lie, that is what can go wrong…Kickstarter has been getting a lot of heat lately for its campaign creators who haven't been keeping their promises to crowdfunders. One recommendation from BostonInno that could prevent this problem in the future is regarding the lack of rating on the site. Unlike Ebay where all users can be scored and rated following all transactions, Kickstarter has no rating system for its campaign creators once their project has been funded. The risk here is that someone can take off with the money, leaving backers high and dry. No matter how terribly a campaign creator screwed their backers over, they can’t be publicly criticized on the site for their failure to keep up their end of the deal. And what’s worse, they can continue to take people’s money without following through with their promises if they create multiple profiles under different email addresses.

For me personally, this type of app is too risky. If I am looking to help someone start a venture, then I want to meet them face to face and see physical evidence of their project. 

I appreciate the benefits and simplicity of Kickstarter. If I were to someday start a project that I needed funding for, I would certainly consider Kickstarter as a platform to use. I don’t see any risks for campaign creators. If they get 100% backing, then they are funded, if not, they can revamp the project and try again.

Meme courtesy of: http://www.finsmes.com/2012/09/meme-day-dealing-crowdfunding.html

My question to you all is, would you consider using Kickstarter? Would you use it as a campaign creator, backer, or both? I’m looking forward to hearing your thoughts!