Who Decides Who Can Raise Money Through Crowdfunding?

Crowdfunding has been receiving some extra coverage this past week, and rightly so. Zach Braff announced a new movie he wanted help funding with a goal of $2 million from backers. This sparked a whole controversy about who should put up campaigns. Should celebrities use resources that are “meant” for folks that couldn’t afford to make a movie?

Nathan Hurst also had an insightful piece on platforms now challenging Kickstarter. They try to take advantage of what Kickstarter lacks, or provide attention to a more niche-specific market. For example, CrowdIt is a new platform that will launch June 4, and plans to roll out equity crowdfunding once it becomes legal with the JOBS (Jumpstart Our Business Startups) Act.

What the real question that these new sites offer and what Kickstarter already has implemented is who decides who can raise money through crowdfunding? Should Kickstarter or any other platform discriminate on who can launch projects? The answer is no.

Kickstarter only vets projects that might not meet its Terms of Service Agreement. The fact that there is not a preventative celebrity clause means Zach Braff is in the right on this one. If you’re against celebrities using a platform to help them further themselves, there are other platforms you can use with more restrictions.

The other side of this is people backed him. He wasn’t just given the money. The general public made a conscience decision to back Braff, and in the process brought the most traffic Kickstarter has ever garnered in a single day. This no doubt lead to more people seeing more projects.

What would happen if anything changed with Kickstarter is it would effect people who made successful campaigns in the past. Would the makers of the Pebble Watch ever be able to put up another campaign since they received $10 million in funding. An alarming 10,266% over funded project? Couldn’t they just afford to make something themselves?

What needs to happen is good projects need to continue getting backed. Whether it’s a previously successful crowdfunded company, a celebrity, or someone trying to breakout in the scene.

About these ads

6 thoughts on “Who Decides Who Can Raise Money Through Crowdfunding?

  1. Yes people did fund Braff, but I see this as a small window into the bigger problems in the world. Wealth inequality. The minute something good happens that will help people advance, the rich and successful immediately move in and ruin it. I dont think Braff is a bad guy at all, but I’m sure even he will admit that if more and more people of his ilk get into it, it will vastly take away from the crowdfunding to those who truly have no other way. There is a limited pie out there, and eventually this will just be a new business model for the rich and successful. Let’s get paid before we make the product. Sorry, but unless people do make a stand and say people like Braff and others who are successful and can find other avenues should take a hike, we’re going to continue down this path where the rich just keep getting richer and the rest of us are left picking our ass wondering what happened.

    • Hey Joe:

      I appreciate the comment, and think you bring up some very good points. What I tried to get across is where do we draw the line? When I mention the Pebble Watch I meant to say even people without influence can make a huge campaign, but since they became “celebrities” on the Kickstarter platform, should that take away from what they do in the future?

      I guess what it really comes down to is what one individual perceives as a celebrity. For example, Zach Braff is definitely not the most famous film maker or actor, just as I am not the most famous blogger/writer. At what point do you determine someone has too much influence/reach/capital to apply for a service?

  2. I don’t think that Kickstarter should restrict the use of their platform to the “common” folk.

    First off, how do you decide celebrity? I think of Amanda Palmer as a celebrity. After all, she got a record deal, and has a few hit songs. Yet, she chose Kickstarter for next album because she didn’t want to play by the record label rules. And to some, Amanda Palmer is not a celebrity at all.

    Fun fact about me: I had no idea who Zach Braff was until this very moment!

    Just because celebrities make a lot of money does not mean they agree with how their creative works could be potentially fucked with. Amanda Palmer is one of those people, and it could be Zach Braff is as well.

    What Kickstarter does need to do though is provide a balance. We don’t just want Kickstarter to become a place for people of great influence to raise money for their projects, and shut out hundreds of great ideas. While Joe up above is a bit marxist on this matter, he is right that eventually Braff’s ilk will overshadow those who truly have no other options.

    I think a lot of this could be solved with better discovery tools from Kickstarter, and making a point to feature folks who don’t possess such a large audience.

    I will end this comment in the most cliche manner possible: with great power, comes great responsibility!

    • Hey Holden:

      Completely agree on your stance. This post was mostly for all the controversy everyone put around Braff’s campaign. Yes, too much celebrity status can begin to dilute the pool of projects offered in a crowdfunding campaign. But ultimately, it’s the general public which decides who gets the funding. All Kickstarter can do is post it to there page.

  3. I don’t think anyone is really suggesting Kickstarter implement draconian measures and pick and choose who can be eligible for funding. I think what people are saying is are we going to allow it, will we continue to blindly shovel money into the hands of those who have plenty already. If we come to a consensus and agree that it’s uncool to scrounge for kickstarter funds when you have a shit ton of your own money sitting in the bank, it will deter the people who are only using the service to take advantage of this large scale exchange of wealth to leave it to the people who genuinely need it. The biggest problem in creating a better economy and general better society is the lack of opportunity. If we keep saying its ok for people like Zach Braff to move in on those opportunities we are just going to keep this spiral to where only the rich keep getting richer. As a society we need to start recognizing this and making it unacceptable for someone with Braff’s means to move into an area meant to better people that are lacking opportunity and means. But the cats already out of the bag, since in general we are a bunch of zombies who could care less, big business is just a step away from figuring out they can steal even more of your money before they even build the product. Then the most influential will easily push out anyone with a modest internet presence and the cycle continues.

    • I think that’s why these other platforms are in place and taking shape. When you talk about people getting money before they make something, there is a crowdfunding platform that touches on that concern called Christie Street which withholds funds until companies have met certain production goals.

      Also, saying celebrities cannot/should not use a service is an unfair precedent that could lead to more restrictions to an otherwise open platform. How do you know someone who posts a project and doesn’t have ‘celebrity status’ doesn’t have a bunch of money in the bank? You simply don’t. I understand the pessimism, but that leads to more conservative stances rather than optimism which leads to progress.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s