My first experience with crowdfunding came by the way of Kickstarter. Crowdfunding to me is when the public willfully gives money to support an individual or a company with hopes to get something back. That return can range from recognition, equity, or discounted products and services. Back in 2013, It was in the news everywhere and I wanted to get a piece of the action. I had just picked up a few shares of several companies on the stock market, and felt that this would be a good way to diversify my portfolio. I didn't really understand what I was getting myself into, but found out quickly.
Crowdfunding is still fairly new and finding it's place in the market. A brief history written on Virgin tells that it dates back as far as 1713 when Alexander Pope set out to translate Greek poetry into English and asked for the world to support his work. In modern day, the same foundations apply.
When I was looking to diversify my portfolio, I went to Kickstarter and backed 2 projects. The first one was a MiiPC backing. (Here is where I get a bit nerdy) This was a small PC running the Android ecosystem and promised the same advantages of the mobile platform. I'm a big fan of tech and thought this product would change the way Android is integrated in home consumer products. My goal at the time was to use it as a home entertainment system, so I went ahead and backed/sent the company $89 and fees/tax. This level of backing gave me one MiiPC at a discounted price. At the end of the project, I played with with the product for a few months and the excitement wore off. It was slow and lacked many of the functionalities I was used to. Right now, It's more It's more of a decoration piece on my table.
The second project I backed didn't quite go my way. MyIDKey was a password management device that promised security online. I'm a big believer in digital security so this project spoke to me in great way and I just had to back it. The company added features along the way which kept the excitement high. At the end of the project, the company had been sold, and none of the backers received their devices. I ended up sending them $99 and fees/tax and I'm pretty much writing it off as a bad investment. Just like the stock market, some investments will be wins and some will be losses.
Nowadays, something else has caught my eye in this marketplace. Audio, written and visual media are leading the world and I've been going trying go all in. There's going to be a Christmas movie in production that's not following the same footprint of some movies from the past. I'm a big fan of cutting out the distribution middle men in the modern market, so I backed them. My thought here is to support successful producers, as well as to exercise my Christmas spirit. There's also a chance to get a part in the movie which could be super fun.
Crowdfunding is a risk just like investing in the stock market. There's some backings like the pebble watch that have been a great success after funding and then there's been some like the ones I've experienced. I'm also very interested in peer to peer lending as well as real estate crowdfunding so I'm watching those markets very closely and learning as much as I can before going all in. There's a lot of opportunity for this type of investing to pick up public interest on any asset and I can't wait to see where it ends up. For a lot of people, crowdfunding may be an easy way to start investing.
Let me know how your crowdfunding adventures have gone.