In the past when someone had idea for an amazing product and wanted to start a company with zero or limited capital, you had to either give away a substantial chunk of the idea to vulture capitalists or hock the family jewels. Although the “Crowdfunding” idea dates back to the 17th century, it took the web to give it a life of its own.
Basically, it’s a means to have a large group of people give a few bucks each, for some measure of reward, whether it be tangible or visceral, to fund a startup. There are now more than a dozen such sites. These sites do take a percentage of the take in compensation. I won’t bother with any names as any search engine will find them for you. This is about the risks associated with this. I’ve had companies disappear after “investing”, which I was very lucky to get back. Bear in mind we are talking tech, and tech ain’t cheap sometimes. You can easily put in thousands into these attempts with zero guarantee they will actually produce a product. So it’s a wee bit like tossing the die in Vegas.
Of about the dozen or so companies I’ve “funded”, exactly one in the last three years has actually shipped me a working product. Remarkably, I still have faith in the concept. The biggest issue is the lack of a whip that sites should provide to force the startup entrepreneurs to get busy and actually make a product in a reasonable time. I actually have one well-established company, not a startup, dragging its feet for almost three years!
The fact that most of this stuff is cutting edge, and as such, gives you substantial geek cred … but really, three years for a streaming audio device?
The sites also fund just about anything you can think of. From indie bands and artists to heart-wrenching pleas from the desperately ill seeking financial help. Just skimming the sites will tell you about modern society and just how much it’s changed (or not) more than just about anything you will ever read. It’s an unfiltered example of the march of human nature and technology. Invest or not, it’s worth a look.
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