Kickstarter's model of allowing projects to raise money by promising future products or services (or often just related T-shirts) isn't quite the same as equity-based crowdfunding. But proponents of that model have pointed to it as the closest example. These new statisitics could raise some reason for concern.
While being responsible to securities regulators may dissuade fraudsters from taking advantage of a crowdfunding platform, it doesn't address the issue of legitimate businesses failing to meet goals.As in any investment, crowdfunding investors must accept there will be risk to the business failing and their money not being returned.Regulators can't punish a business for not succeeding if they followed all the rules.
The risk isn't a reason to avoid an equity-based crowdfunding platform altogether.But it is one more consideration to be made when designing a system that equally balances startups' need for capital with the common investors' need for protection.
Founded in 2010, the industry website, Crowdsourcing.org, is a neutral organization dedicated solely
to crowdsourcing and crowdfunding. As one of the most influential and credible authorities in the crowdsourcing space,
Crowdsourcing.org is recognized worldwide for its intellectual capital, crowdsourcing and crowdfunding
practice expertise and unbiased thought leadership.