Quote:
Originally Posted by r00t
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Isn't it great that when you don't like a project, you can just exit the page? A number industries like small electronics manufacturing wouldn't have a fraction of the innovations we're seeing come out daily if it weren't for kickstarter types of funding, there's nothing wrong with it other than humanity should have figured it out sooner.
And no, money for nothing is not the definition of kickstarter, and isn't what's going on with hers. Your equity in the company, for $10, is a bag of treats. You can't expect to become a major stockholder in any company for that kind of money.
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I'm really quite aware of how Kickstarter works. Compare the model of KIVA to this.
Kiva - you give small amounts, 'micro-loans', with a defined interest rate depending on loan amount and risk associated. The recipient of the money then uses this capital to develop their product/service and then pays back the loan. This allows small companies/individual proprietors to raise funds where they otherwise couldn't, and the investor not only helps out small business, but gets their money back + interest. There is a risk of default, but that is what the interest rate is for.
Kickstarter - you give small amounts, 'micro-donations', where the only required payment is the 'levels' defined by kickstarter. The recipient of the money then uses this capital to develop their product/service and then sends out their level-payments. This allows small companies/individual proprietors to raise funds where they otherwise couldn't, and the investor helps out small business as a
donation - they may get a small reward (or not). There is a risk of default, but you donated your money so there's no obligation. They don't even have to pay out the levels if their project falls through.
They are very similar, except one is accountable and the other isn't. Your claim of small electronics would be just as well funded by micro-lending. Kickstarter has, and always will be, a scam. It acts as if it's a public funding enterprise (like PBS) and accepts donations, no 'equity'.
And yes, $10 isn't enough for anything. However, I've seen kickstarter campaigns that have levels for $100k - i think that's some equity money right there (but you could be an EXTRA IN A MOVIE!).