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TheStreet Open House

After the Crowds Leave: Finding the Post-Kickstarter Ecosystem

Stocks in this article: WMT AMZN

NEW YORK ( TheStreet) -- After launching its Kickstarter project, LIFX Labs got a "tidal wave" of queries from venture capitalists, manufacturers and distributors. Two days later, the team stopped taking money, having reached $1.3 million, which was well above their initial $100,000 request. There is still 26 days to go.

"Some of the biggest tech companies in the world have reached out to us via Kickstarter, and this has given us many more options than we anticipated," said Andrew Birt, cofounder for the smartphone app-controlled LED light bulb. "We didn't expect interest from manufacturers and retailers of the size we're talking to this early, it's a real privilege."

Now the hard part: Delivering product and turning it into a business.

Crowdfunding, most notably using Kickstarter.com, is disrupting the film, videogame, tech gadgets, toys and a slew of other product industries. The funding fever is phenomenal with projects like a modern-day watch attracting $10.3 million!

But this alternative route to investors -- who don't get equity, but rather some sort of reward -- relies heavily on the project creators, who dream up the idea, build the campaign and then social network their souls out. Kickstarter, Indiegogo and others provide the platform, but once it's over it's up to the creator to make sure the products get made and incentives are delivered. With very little help.

Misguided budgets, undelivered product and other tragic tales are becoming common, causing Kickstarter to recently adjust terms to make sure creators deliver on promises. But Kickstarter's minimal FAQ page plus some tips don't go as far as to advise how to get stuff made, how to deliver or where to sell. As Kickstarter noted last month, Kickstarter is not a store.

>>Also see: 10 Niche Crowdfunding Sites: Which One Fits You? and Crowdfunding Fills Gap for Investors and Companies

Other businesses are happily stepping up. From patent agents and public-relations firms to shippers and tax accountants, companies are adding crowdfunding keywords to their sites and proactively pursuing successful projects. Shipping and logistics company Shipwire uses past Kickstarter clients, like the Glif, to approach new ones. DailyCrowdsource.com cornered the news angle and is working on another Crowdopolis conference.

Outgrow.me, Kickfollower.com and TinyLightbulbs.com created online markets that showcase and sometimes sell successful crowdfunded projects.

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