Video game developer of Double Fine shocked investors and raised over $1 million in 24 hours on
https://www.kickstarter.com/ (World’s largest platform for creative projects)
March 13, 2012 – Video game developer of Double Fine raises $3 million ($3,336,371) through 87,142 backers with initial goal of $400,000 goal for its new adventure game.
Is crowd funding this the new way to source venture capital and angel investment?
https://www.kickstarter.com/ LAUNCHES its 1 Billionth dollar pledged MILESTONE.
If you are a start up and look at using a crowd funding model to raise money it may make sense from both research and ROI (return on investment) perspectives.
Why should an entrepreneur spend years building a better idea?
Research and development costs up-front can be in the thousands to millions range. Then to develop or create the product or service is costly as at this stage its unproven, and you don’t know if it will align with market needs.
All of these upfront costs may now be unnecessary – with Crowd funding. With Crowd Funding, an entrepreneur can now simply ask potential Customers, many potential Customers.
An entrepreneur is able to request feedback by asking for support ($ cash) from the public online. Using this funding method, entrepreneurs are able to create bankable products and services from day one without all upfront additional expenses.
Other business models make educated guesses as to what consumers will buy and how much.
Consumer based Business Model: Crowd funding provides a platform where consumers decide what products or services they like best and fund these (usually through pledges).
Only the products or services consumers like best are funded in crowd funding.
Crowd funding, the new way to source Angel Investment and Venture Capital?