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View Full Version : Will Equity Crowdfundng Hurt Reward and Donation Crowdfunding?



SocialCam
07-29-2013, 03:26 PM
What's your thoughts on this? Will the emergence of equity crowdfunding in the US hurt the already popular models of Rewards based crowdfunding and donation based crowdfunding? Will people be less likely to donate to a cause or give funds for a reward if there are other projects out there giving contributers actual equity in their projects? Where will we be in 2 to 3 years? Will Kickstarter and Indiegogo be just as popular as they are today?

Trojan3dgym
07-29-2013, 04:35 PM
I'd like to think they would be just as popular. I think people who give for a reward do so because there is something tangable rather than just pure profit. It sets them apart from the money grabbing society we live in and makes them feel good. It's those two distinct types of people who look at crowd funding. People who want a reward understand that an idea has to start somewhere. Those who want equity aren't bothered and probably don't understand that. If it did start to change then maybe a reward could be to have first choice at an equity investment before launching an equity giving pitch, but I think most wouldn't take advantage of that.

HelenatTCM
08-01-2013, 10:40 AM
In my experience equity crowd funding is another outlet for those who already invest and operate portfolios. Crowdcube for example asks that funders already be 'sophisticated' investors with an existing portfolio. It also asks for around 15 pages worth of specific format financial projections, a plan and existing investment from applicants. I don't think the two will ever really be interchangeable - R&D crowd funding will remain the preserve of the everyday person looking to make a difference and be rewarded. Though I would be happy to see the option of offering equity to those people who want to make a larger contribution, as in the long run it can bring the bigger rewards. I think the joy of R&D crowd funding and its guarantee of survival is its flexibility and accessibility - something crowd equity already seems to lack.

SocialCam
08-01-2013, 11:05 AM
It would be interesting if the two crowdfunding ideas meet. Hybrid Reward/Equity projects, where top funders get an equity stake. May make for more paperwork for the project creators, but could mean substantially higher contributions.