Question

PRESENTATION #03 Chapter Two Technology If you have a great product idea but no money, never fear, there's Kickstarter, an online crowdfunding site. Founded in 2009, Kickstarter enables companies to raise money from multiple individuals and has helped launch more than 150,000 projects with $3.8 billion in pledges from over 15 million investors. Pebble Technology Corporation created a "smart wristwatch called Pebble Time, which works with iPhones or Android phones, but did not have the funding to produce and market the device. So young CEO Eric Migicovsky turned to Kickstarter for crowdfunding. His modest goal was to raise 100,000, but the company raised SI million in only one day and a total of S10.27 million in just over one month! Over 70,000 people pre-ordered the $179 watch. Kickstarter takes a 5 percent fee on the total funds raised and Amazon Payments handles processing the funds. Kickstarter charges pledgers' credit cards and the project creator receives the funds within only a few weeks. The JOBS Act legislation signed into law in 2012 provides a legal framework for this type of financing, whic However, Kickstarter and similar sites do not guarantee that the projects will delivers as promised, and some people are concerned that crowdfunding will encourage crowdfrauding. h is expected grow even faster as a result. 1. Explore Exploding Kittens on Kickstarter. Why was this crowdfunding venture so successful? 2. Find another crowdfunding site and describe two projects 3. Why are consumers so willing to provide money for unproven products or projects?

Answer 1

1. Crowdfunding attracts investors who believe in the mission and vision of business and commit money in form of donation or charity. The risk associated with crowdfunding is quite low. Also there is no requirement of profit or capital sharing with the investor. These are the primary 2 reasons that the crowdfunding was successful in the given case.

2. Another site which supports crowdfunding is Indiegogo. The 2 projects facilitated by crowdfunding on Indiegogo are:

• Funcl Wireless Headphones
• Somiflash: World’s Smartest flash drive with a capacity of 1 TB

https://www.indiegogo.com/explore/all?project_type=all&project_timing=all&sort=trending

3. Investors get attracted to invest in crowdfunding projects because:

• The risks associated with the avenue is quite less
• Creative instinct of the investors get facilitated
• By encouraging a startup, the overall goodwill of the investor increases