To be fair, Kickstarter et al. are not shops. We had this discussion many times over the year, the point of crowdfunding was to invest in potentially interesting ideas, and not to have a preordering venue. So the risk of a project not delivering was always there, a part of the game. But when Kickstarter was busy explaining people they're not a preorder store, startups and VCs figured out that crowdfunding is an excellent marketing channel, so I don't know if anyone is sure what the whole concept is supposed to be anymore.
EDIT: to commenters responding - fair enough. There's no equity so technically it's not investing. Maybe "patronage" is a better word.
> Kickstarter et al. are not shops. [...] the point of crowdfunding was to invest in potentially interesting ideas, and not to have a preordering venue
A purchase is when I give you money in exchange for a product. You're right, this isn't exactly Kickstarter's business model. However, an investment is when I give you money in exchange for an equity stake. This certainly isn't Kickstarter's business model.
If you give a Kickstarter money, you might get a product; you won't get any equity. Whatever that makes it, it's more a shop than it is an investment platform.
> If you give a Kickstarter money, you might get a product; you won't get any equity. Whatever that makes it, it's more a shop than it is an investment platform.
Its a donation platform with the possibility of receiving something for your donation.
Likening Kickstarter to an investment has always concerned me. Investment implies a return if the idea is successful and (as you can see from Oculus Rift) early kickstarter backers didn't get any of the very large payout that Oculus got when the were bought by Facebook.
We're starting to see that idea come about with platforms like https://www.seedrs.com/ where if it goes swimingly the backers do well out of it, which kind of offsets the risk.
I think the problem with standard crowd-funding is the people doing the project obviously have an interest in downplaying the risks, and the platform does too, so with no regulation that's exactly what'll happen, and then we get a lot of very late, underdelivering projects which will sour people on the whole concept.
As I remember it, Kickstarter was initially focussed around patronage. eg, give some money to a musician or film maker to make a new album or film, and your 'reward' might be access to a work-in-progress blog and a digital copy of the album/film once it was complete. ie, the rewards had a low marginal cost, and didn't consume most of the money raised during the funding period.
At some point pretty quickly Kickstarter turned in to a speculative pre-ordering service.
EDIT: to commenters responding - fair enough. There's no equity so technically it's not investing. Maybe "patronage" is a better word.