Kickstarter

[Mike Farley]

TriggerTrap caused quite a stir recently when it announced a development cost overrun for its proposed Ada product and had consequently cancelled the project as it was no longer financially viable. The company had raised the funds it required on Kickstarter and had spent around 80% of what it had received when it pulled the plug. As a result, just under 2,000 investors will each lose around £120 each. A number of photography related products have come into existence as a result of individual investors pledging small amounts through crowd source funding schemes such as Kickstarter, with the Petzval lens being just one example, but clearly there are risks for those who contribute.

Crowd source funding is an attractive option for companies as the money raised is income, usually being prepayment for products which do not yet exist, rather than a loan from a financial institution on which interest has to be paid. Convincing a bank to lend money for such schemes can also be very difficult since, understandably, the bank wants as much reassurance as possible that it will be repaid. Kickstarter and its ilk provides an alternative not just for start-ups but established companies as well. The Petzval lens was created by Lomography which has been in existence for a number of years and Ada would not have been TriggerTrap's first offering.

Amateur Photographer has more information about the implications for small investors who choose to bear the risk in order to be the first to obtain new products in which they are interested. In essence, it seems to be best to treat the money as a donation rather than an upfront payment as it is unlikely there will be any form of protection for the investment.

http://www.amateurphotographer.co.uk/la ... cash-45607

[Mike Farley]

Amateur Photographer has followed its original article with one describing photography related Kickstarter projects where investors did not receive the promised products. In the main, it appears that those receiving money were either too optimistic and/or simply did not have the experience to develop and market their inventions. However, given the silent treatment some have given their backers, the possibility of fraud cannot be ruled out and I am not sure what provisions Kickstarter makes against this. At least TriggerTrap has been open about its failure, although as an established company it might have considered this was the least worst option in terms of PR.

Caveat emptor.

http://www.amateurphotographer.co.uk/la ... ered-45430