When I made this post, I didn’t talk about the legal side of this, because I didn’t know there was a legal problem with doing this.
But then I saw this comment, and also discussed this with a friend, and found out that this would count as selling securities, and would be illegal, which explains why no crowdfunding platform did it.
And then today I looked into Angel Studios, and specifically, Angel Funding, and found out that they’re doing crowdfunding with investment legally (SEC regulation and all)! So if this is legal, perhaps it’s possible to do refund bonuses legally as well, if you do all the necessary work and jump through the necessary hoops.
It also shows the potential of investment crowdfunding. If we look at their movie David, which is currently gathering funds, there’s 11,238 people Investing $52,431,109. On average, that’s $4665.5, which is 1-2 orders of magnitude higher than regular crowdfunding. For reference, if all 185,341 backers on Brandon Sanderson’s Kickstarter project (which is the most funded project ever, currently) pledged this amount, it would raise $864,708,435!
I think refund bonuses don’t have the potential to get projects to these funding levels, because they’re not nearly as good as investments as what Angel offers. But I think it does give some reference. Though Angel isn’t fit for refund bonuses because their campaigns aren’t all-or-nothing (they get all the money invested even if they don’t reach the goal), I think if you do an all or nothing campaign you can combine the two models, and that would make for a really explosive campaign.
When I made this post, I didn’t talk about the legal side of this, because I didn’t know there was a legal problem with doing this.
But then I saw this comment, and also discussed this with a friend, and found out that this would count as selling securities, and would be illegal, which explains why no crowdfunding platform did it.
And then today I looked into Angel Studios, and specifically, Angel Funding, and found out that they’re doing crowdfunding with investment legally (SEC regulation and all)! So if this is legal, perhaps it’s possible to do refund bonuses legally as well, if you do all the necessary work and jump through the necessary hoops.
It also shows the potential of investment crowdfunding. If we look at their movie David, which is currently gathering funds, there’s 11,238 people Investing $52,431,109. On average, that’s $4665.5, which is 1-2 orders of magnitude higher than regular crowdfunding. For reference, if all 185,341 backers on Brandon Sanderson’s Kickstarter project (which is the most funded project ever, currently) pledged this amount, it would raise $864,708,435!
I think refund bonuses don’t have the potential to get projects to these funding levels, because they’re not nearly as good as investments as what Angel offers. But I think it does give some reference. Though Angel isn’t fit for refund bonuses because their campaigns aren’t all-or-nothing (they get all the money invested even if they don’t reach the goal), I think if you do an all or nothing campaign you can combine the two models, and that would make for a really explosive campaign.
If someone knows more about the legal side of this I would love to hear more, cause I barely know how this all works.