This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Digital Skeptic: Crowdfunding Follows Porn Into Digital Slum

NEW YORK ( TheStreet) -- Steve King really did raise $313,490 on Kickstarter. But what happens now that he's been "Kickstarted"?

"It absolutely democratizes the process of raising money," King told me as he demonstrated his red-hot, newly crowdfunded tablet pen tool, The Hand Stylus. He says people like him have a shot at changing the world.

"But are the markets ready for this?" he asks. "And what actually happens to businesses like mine that succeed there? That I don't know."

King knows how to play the part of crowdfunding superstar, as gave me the guided tour on how he and business partner Christine Gonsalves got their funding.

Relying on a keen sense of retail sales developed as the owner of the Alameda, Calif.-based gift shop Whales & Friends, King obsessed over his stylus idea until he created a tool he liked. He traveled to China for prototyping and spent two weeks making a sales video. On May 3, he posted his pitch on Kickstarter, setting his original goal at $25,000.


Amazingly, when the offer closed six weeks later, north of $300,00 was pledged -- with Kickstarter and Amazon (AMZN) ripping about $30,000 out for their trouble, he says -- in return for preorders of a slick, retractable stylus that turns a tablet computer into a virtual drawing board.

Not surprisingly, King said, "I am an evangelist for Kickstarter."

But, ever the thoughtful entrepreneur, he also saw issues.

"Many businesses and people are not prepared for Kickstarter," he warned. "It's trickier than it looks."

This is supposed to be crowdfunding's year in the business sun. The JOBS Act -- signed into law in April of last year -- has powerful new language meant to bring crowdfunding to the investor mob.

"Crowdfunding for Everyone" is the marketing line from San Diego-based GoFundMe that captures the land-rush vibe.

And crowdfunding has become crowded indeed. There is Ireland-based Fund It, Fayetteville, Ark.-based EquityNet, or San Francisco's hip Indiegogo and many, many more. America's A-List investors are also getting in. Former Treasury secretary Larry Summers made a significant investment in a peer-to-peer lending outfit LendingClub last year. Heck, you can even go on a crowdfunding cruise. Entrepreneur Robert Dobyns is sponsoring just such a floating meet-up that embarks from Galveston, Texas, later this year.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%
YHOO $44.52 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs