The Pros and Cons of Crowdfunding

Crowdfunded projects where people donate money to fund creative projects of their choice on websites like Kickstarter have become quite the rage over the last several years. Crowdfund­ing websites have been used for everything from creating light-pulsing earbuds to raising $55,000 for a man to make some potato salad. On paper, Kickstarter and similar websites sound like a haven for both creators and their fans to come together and create creative projects that wouldn’t be possible any other way, but it doesn’t always end up working that way.

INFOGRAPHIC BY AMANDA RIDDLE

For all the excellent or at least amusing proj­ects that have been given life through websites like Kickstarter and indiegogo, there has also been a lot of failures. A pair of video-recording glasses called Zion Eyez made nearly $350,000 before its creators went largely silent for years. A more recent example is the computer-turned-mobile video-game Godus, where people gave the often less than entirely honest developer Peter Molyneux nearly half a million dollars in donations and then had to sit through several years of controversial shifts in direction and arguably broken promises.

It’s a story that’s been repeated throughout the relatively short history of internet crowd­funding: ambitious and/or dishonest people promise great things and their enthusiasm is matched in donations, but they struggle to deliver. An extreme example of this is a per­petual motion machine project that went up on Kickstarter late last year and managed to get $128 in potential donations before it failed. It varies between websites whether donators get their money back or not if the project fails to meet its goals or has issues delivering the final product, but it’s amusing and more than a little sad that people would throw money behind ridiculous or clearly unrealistic projects like that. The problem may be that people do­nate their money without ever considering the real chance that they’ll never get anything in return. Refunds can happen, but it’s often a messy process and shouldn’t be relied on.

All that said, you can’t be too harsh on those who fund these projects and many of the peo­ple who dream them up. Whether it be creating a revolutionary new piece of technology, an exciting independent film that couldn’t get funded anywhere else, the hottest new piece of fashion, or a video-game that breaks boundar­ies, creators get excited and make lavish prom­ises often because they genuinely think they can do those things. The people donating their money get swept along for the ride, and it some­times pans out, and sometimes bombs spec­tacularly. However, despite the potential short­comings, crowdfunding has tremendous potential when it’s handled right.

When crowdfunding works, it can do some amazing things. The TV series Veronica Mars got a reunion movie funded in what was at the time the highest backed campaign in Kick­starter history. There’s been some fantastic fashion projects like the 10-Year Hoodie or Gustin’s crowdfunded jeans line. The often unlucky video-game developer Obsidian En­tertainment raked in $4 million last year to make a classic-styled role-playing game that might have been difficult to get green-lighted any other way. And where would we be without the classic crowdfunded party game Cards Against Humanity?

What potential donors might take away from all this is simple—crowdfunding can be an excellent way to support projects that wouldn’t be able to exist any other way, but be careful with your money. If it sounds realistic and cre­ative and you’re not afraid of a little risk, by all means put your money behind it. On the oth­er hand, if something sounds too good to be true, it probably is.