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Maqubela: It seems there will soon be platforms to raise money for almost anything, from the local bakery you hope to start in your neighborhood, to your high-technology startup idea, to donations for a church mission trip. What will such an economy look like? To answer that question, I spoke with with my colleague Jessica Jackley…
Jackley: Not all things can or should be crowdfunded…The ventures that keep things light and fun, easy to understand, that have a compelling story, a sexy retail product, will have an easier time getting people to rally around them and contribute. A start-up doing something that’s difficult to communicate or doesn’t offer any kind of retail product will have a tougher go at it.
Maqubela: This seems to line up with your Kiva philosophy: crowdfunding as a way of validating, or manifesting, an emotional connection to an individual or a narrative.
Jackley: Investors in big and in small deals tend to invest in people and in stories that resonate with them.
Maqubela: Kickstarter provided more than $150 million in funding to the arts in 2012, outpacing the National Endowment for the Arts (NEA), but is that a lot of money?
Jackley: One of the smartest things Kickstarter has done, in my opinion, is give people a great shopping experience related to the arts, that funds the arts. In essence, they’ve gotten people to pay $200 for a t-shirt plus the feeling of participation in another artist’s endeavor…Healthcare professionals don’t make art (in any traditional sense).
Maqubela: Endowing important projects requires sustained interest over time, and the Internet trends heavily towards short term thinking. I’m skeptical that crowdfunding could sustain longer-term projects…
Jackley: I wonder about that too.
Maqubela: But is the wisdom of the crowds really good?
Jackley: I see no problem with opening up more ways for entrepreneurs get capital — in general I think the more the merrier on this front — but again, we need to respect the place of crowdfunding in a very big market, and not try to make it more than it should be.