Re: All the risky of being a shareholder...
"- If the company fails then you get nothing, while this can be true as a shareholder I believe if a company folds then after debts are paid the shareholders are entitled to something, this does not apply to kickstarter AFAIK."
That's pretty much a technicality as a company usually only folds when it can't pay it's debts. In that case the creditors might see pennies in the pound as liquidators wind up the assets, shareholders wont see squat.
I think there are two main issues with kickstarted organisations:
- Key difference is with successful startups - traditional investors will own a percentage and see dividends whereas KS backers just get a product and then you're done. This isn't inherently terrible as long as the backers don't put in too much money and properly understand the risks. Hopefully this comes to be more the norm as this type of funding matures.
-The other thing is the level of control backers have after a project is funded and the money is gone. The thread has already touched on the issue of delivery dates sliding as the project snowballs into something that needs an industrial production line, but it also includes the project dropping promised features or dropping in unwanted extras or extra hoops to jump through that piss the backer off. Examples include hidden costs for shipping outside the US, or having to give a credit card number to sign up to their store. The backer generally can't do shit about any of these except ask for a refund, which they are unlikely to get unless it can be proven the project clearly and unambiguously stepped over a line somewhere.