Crowdfunding platforms are a boon to entrepreneurial startups, providing not only finance but also links to potential customers. Kickstarter alone has successfully funded over 200,000 projects.
When Do Consumers Prefer Crowdfunded Products?
One study found that people were willing to pay about 21% more for a product when they were told it was crowdfunded.
May 10, 2021
Illustration by Kiersten Essenpreis
Summary.
Research suggests that companies financed through crowdfunding are often seem by consumers as higher quality and less elitist than products financed through VCs or other more traditional forms of start-up finance. This may explain why Amazon markets a line of Kickstarter financed products. The effect is not universal, however: where safety is an issue, the judgment of ordinary consumers is less valued than the expertise of professional investors.