Over the course of the last year, Kickstarter has risen to prominence as one of the easiest and most effective ways to fund projects and ideas. By relying on the collective wisdom of crowds, Kickstarter tends to fund projects which are generally recognized by would-be investors as good ideas. The market forces at work here are generally no different than those which govern the more established, more institutional market for venture capital. It's no secret that financial incentive is a great motivator for producing discerning analysis and careful decision-making.
However, there are several variables that separate Kickstarter projects from venture capital investing. Most of these involve reducing the barriers to entry for small-time investors. An analogy to political fundraising is appropriate: large institutions may dominate funding in federal elections (particularly for the presidency), but it would be impractical for these institutions to devote time and resources supporting candidates for state and local offices. Nevertheless, funding is no less important for those candidates - and in fact, campaign dollars spent there have a much greater impact on the race.
However, there are several variables that separate Kickstarter projects from venture capital investing. Most of these involve reducing the barriers to entry for small-time investors. An analogy to political fundraising is appropriate: large institutions may dominate funding in federal elections (particularly for the presidency), but it would be impractical for these institutions to devote time and resources supporting candidates for state and local offices. Nevertheless, funding is no less important for those candidates - and in fact, campaign dollars spent there have a much greater impact on the race.
