Will Crowdfunding Crowd Out Venture Capital

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2 pointssomid32 comments

My main concern with crowdfunding is the level of protecting the crowd gets. Assuming that startups and founders do align their interests with the crowd, how and where does the crowd get to help guide the direction of the company?

What mechanisms are in place to keep the founders honest? I've seen many success stories on Kickstarter, are there any widely known failures?

There are some things that took a weirdly long time to happen. The pen and the torch are examples, but both are now shipping.

(http://www.kickstarter.com/projects/527051507/hexbright-an-o...)

(http://www.kickstarter.com/projects/cwandt/pen-type-a-a-mini...)

There's the lockpicks, which I think are still in trouble:

(http://www.kickstarter.com/projects/schuyler/lockpicks-by-op...)

These don't show people wilfully defrauding funders. I think they show people being overwhelmed by demand, and unprepared for the problems of manufacturing hardware.

Design for manufacture is interesting and has many small tricky gotchas. Add in bizarre export rules and foreign languages and it's not surprising that hardware manufacture is difficult.

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