The use of crowd funding for new photographic (ad)ventures

[Agulliver]

crowdfunding has an inherent ingredient of dishonesty built in,

No, it does not. That is an inflammatory statement and demonstrably false.

 

[Film-Niko]

People need to understand that crowdfunding is not the same as ordering goods or services. It is effectively a donation or investment. There is simply nothing to be gained by saying "I disagree". Them's the terms and conditions. That is exactly what crowdfunding is. Donating to or investing in a new endeavour in the hope that it comes to fruition.

I am fully prepared to believe that some entities who organise crowdfunding projects are more honest than others. Some may be honest but naive. Some are honest but face bad luck.

As long as one reads the information carefully and understands that this is a donation and not an order, I don't have any issue with it. I have contributed to a few and seen at least something happen and make it to market, even if it wasn't the product initially hoped for. But I contribute what I can afford to lose, in the hope that my little bit will be joined by thousands of other small contributors and perhaps a handful of larger ones to give the project the best chance of success.

Whether you are an enthusiastic amateur, a start-up company or an existing company....you need to fund the R&D to bring a new product to market somehow. For those at the smaller end, the individuals and the small businesses a crowdfunding campaign may well be the only feasible way to achieve this. I know lots of musicians who crowdfund recording of albums because they don't have a record deal. It runs into thousands, can easily be tens of thousands even if the band is able to do the mixing and mastering themselves. These are guys who don't have the backing of record labels and the only way to get the music recorded and released is to gather up most of the associated costs in advance by a crowdfund campaign. It's the same with niche within niche photo products.

I do think that the people who complain they've been fleeced or conned are generally bleating. Except in a very small number of cases where the organiser was actually dishonest, took the money and ran without even trying to develop a product.

I can completely agree. Very good description.

 

[koraks]

It is effectively a donation or investment. [...] Donating to or investing in a new endeavour in the hope that it comes to fruition.

There's a massive difference between an investment and a donation. As I understand it, most kickstarters are effectively donations-based as there's no exchange of equity. This is the whole trouble with how people respond to Kickstarter-type initiatives: do they get anything in return, or not? So by taking donations and investments in a single stride, the waters remain as clear as mud as they have been before.

 

[Agulliver]

There's no exchange of equity but there's the hope of a return - in the form of a "reward"....usually the product who's development you're backing.

 

[koraks]

So the term "investment" really does not apply here. I think you've just demonstrated a big part of the problem: people easily assume all manner of things based on their own preconceptions of how something like this might work - or even what certain terms mean. And the subsequently realize that it's a little different from how they imagined it.

Of course, engaging the general public in venture building beings some unique challenges you don't have (it much less so) when working with seasoned investors. I think this thread rightfully calls into question whether platforms like Kickstarter are sufficiently successful in facing these challenges.

 

[Pieter12]

Not sure why it is not a form of investment. No investment promises returns, many if not most, deliver losses.

 

[MFstooges]

You get asset in investment. Some people even call buying a car as investment even though they're losing money but they do have residual value.

 

[MattKing]

There are differences between investments and investments designed to give a particular type of return.
I invest a lot of time and effort into Photrio. No real financial benefits, other than a few small sales.
Lots of benefits in return though - the non-financial types, of course.

 

[Pieter12]

You get asset in investment. Some people even call buying a car as investment even though they're losing money but they do have residual value.

Most times you get a piece of paper that can end up being worthless.

 

[Don_ih]

Investment literally means to put clothes on....

 

[Pieter12]

Investment literally means to put clothes on....

Sometimes the Emperor has no clothes.

 

[Sirius Glass]

Not everyone sees what I see, but crowdfunding has an inherent ingredient of dishonesty built in, and fine print makes it legal.

Risky in crowdfunding means that there are risks involved, not that it is inherently dishonest. As I posted earlier, one should read all the material carefully and balance to cost versus desire & need versus risks.

 

[MFstooges]

There are differences between investments and investments designed to give a particular type of return.
I invest a lot of time and effort into Photrio. No real financial benefits, other than a few small sales.
Lots of benefits in return though - the non-financial types, of course.

Intangible asset, still an asset.

 

[Pieter12]

Intangible asset, still an asset.

So the fact that you think you are supporting something of use or value to you should fall into that category.

 

[Agulliver]

There are differences between investments and investments designed to give a particular type of return.
I invest a lot of time and effort into Photrio. No real financial benefits, other than a few small sales.
Lots of benefits in return though - the non-financial types, of course.

Yes this is what I was thinking when I used the word "investment" alongside "donation". You're investing time and money into an effort which may or may not yield a product at the end of it. I don't mean to say you're investing in a company, which as @koraks says usually means an exchange of funds in return for a portion of the company or of it's projected profits.

As others have already said. Read the details. Decide if the project seems viable. If it's not a project you fully understand from the technical viewpoint then treat with extra caution. Only donate what you can afford to lose. There have never been any guarantees with R&D of new products, and such work has always cost money. When Rich Uncle gave $20,000 he knew there was a possibility that Hopeful Nephew might not succeed. Same here. That is not inherently dishonest, it's how product development goes. For every success there are myriad failures....usually with honest intent.

 

[koraks]

You're investing time and money into an effort which may or may not yield a product at the end of it.

But there's a difference between 'spending' and 'investing'. That's the point I was making. Anyway, you understand what I said, evidently.

Read the details. Decide if the project seems viable.

I think a big part of the problem is that many people are just not capable of doing this in such a way to prevent their walking away disappointed. The fact that this thread exists, is testament to it. And I think that's the challenge Kickstarter & co need to address. How do you inform in an adequate way an audience that may not even be aware of the most basic aspects of throwing money at something?

 

[MFstooges]

So the fact that you think you are supporting something of use or value to you should fall into that category.

What fact?

 

[Nicholas Lindan]

The dispute here seems to be over the meaning of the word 'investing.'

My use of the word is the purchase of fungible assets with the plan of future sales at a profit.

It has a meaning in the purchase of capital equipment. The equipment will turn to rust and have no future value, but it will have made something worth more than the equipment's purchase price.

Most usage of the word, however, seems to be as justification for paying too much for something one doesn't really need. "No dear, $1,200 wasn't too much to pay for it. It's an investment." I suppose one could say it is an investment in one's future pleasure, sort of like buying drugs; though such investments have a tendency to go up in smoke.

 

[Sirius Glass]

I suspect, no proof, that some of the investors react on impulse and may not put much thought into the project.

 

[DanyB]

Crowdfounding is very interesting but in my opinion one should be well known in order to raise enough money to accomplish its project.
Even if the project is good and valid, if you are almost unknown you can’t go too far.
What do you think guys?