Donor-based fundraising is huge nowadays, with platforms like Kickstarter and IndieGoGo receiving tons of traffic and millions of dollars in contributions each year. It makes sense for a lot of reasons, from demonstrating a presence in the market to rustling up pre-release interest in a product.
It’s even a great way for for would be inventors and innovators to raise the capital necessary for projects they’d never be able to do on their own.
This method of money pooling has its downsides though, namely this: people eventually expect you to deliver on your promises.
So many small companies end up in a panic once the campaigning is over and it’s really time to build a business, launch an invention, or deliver an innovative new service. It’s a problem of putting the cart before the horse.
Because I’ve had some experience with this problem before, I recently wrote an article for Young Upstarts about how to navigate the tumultuous world of crowdfunded projects. Read it here.