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Success of Crowdfunding Puts Pressure on Entrepreneurs

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Success of Crowdfunding Puts Pressure on Entrepreneurs @ NYTimes.com.

Crowdfunding sites like Kickstarter and IndieGogo are letting designers and other creative people connect with audiences who want to finance their dreams, and they are becoming increasingly popular. Nearly three million people have helped a total of 30,000 projects meet their fund-raising goals on Kickstarter, the largest such site, to the tune of $300 million in pledges.

But for the creators of these projects, getting the money is sometimes the easy part. They then have to turn their dreams into reality, with a crowd keeping an eye on their progress.

This new model comes with a host of potential pitfalls that are often difficult for project creators to anticipate, and hard for the armchair philanthropists who back them to grasp. Backers are essentially putting their trust in the project creators, giving them cash in return for the promise of a future reward.


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