Quote:
Originally Posted by Jonas Pilot
So for a $5,000.00 investment I get my name on a wall, my name on a menu, a free soda, a free t-shirt, my name on a lunch special, a web link, 52 lunches for two, and a used table. All this for only a $5,000.00 donation. That sounds like a fair deal, for the business.
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I take it you (and others) are somewhat unfamiliar with Kickstarter?
Kickstarter is a way of crowd-sourcing startup investments. Individuals can post business plans, set investment levels, and set rewards. Because Kickstarter can't deal with ensuring everyone is an accredited investor, you are really "pre buying" and not technically "investing".
The person running the campaign chooses what you are buying for your "investment". Sometimes they want to build a $50 widget, and a $250 investment gets you 5 widgets, or 5 widgets and a thank you note, or generally some other scenario of you getting exactly what you purchased.
In other campaigns, the person is looking for pseudo-donations, the value of the thing you get is going to be less than the value of the goods/services you receive, but that is only if you are discounting the philanthropic effect of your donation.
if the funding goals are not met, the person does not get the partial funds raised.
There is absolutely nothing wrong with this method of raising funds. It is more beneficial to the entrepreneur than taking out a bank loan, and gives more people the ability to help participate in the stimulation of the economy, with financial risk managed to their tolerance level.