Crowdfunding Hits Can Leave Investors Empty Handed

There’s a lot of enthusiasm about crowdfunding’s potential as an engine for innovation. But not all crowdfunding is created equal. Case in point: the Elevation Dock for the iPhone received $1.5 million in funding from its Kickstarter campaign, but missed its projected April shipping date. The dock still hasn’t been delivered, and the release of the iPhone 5 now raises compatibility issues, leaving backers with little to show for their investment.

There’s a lot of enthusiasm about crowdfunding’s potential as an engine for innovation. But not all crowdfunding is created equal. Case in point: the Elevation Dock for the iPhone received $1.5 million in funding from its Kickstarter campaign, but missed its projected April shipping date. The dock still hasn’t been delivered, and the release of the iPhone 5 now raises compatibility issues, leaving backers with little to show for their investment. Smartplanet’s Laura Shin suggests investors keep their ROI expectations in check and bone up on the regulatory guidelines of the new JOBS Act. She also cautions project creators to be careful what they wish for: a successful campaign can raise expectations and trigger a deluge of investor relations administration.

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