Question

These questions are based off the video "Crowdfunding explained by exploding kittens" What is crowdfunding? What did the guys behind the crowdfunding of Exploding Kittens learn about the downside of crowdfunding? Why would a new product developer use crowdfunding? (Explain the benefits.) Go to the Kickstarter website. Are there any products, services or businesses you might be interested in to invest?

Answer 1

1. What is Crowdfunding?

Ans.: Crowdfunding is raising funds online through a crowd of people. It is basically, sourcing funding from the people for your new product or idea or project in the market. The owner of the product demonstrates the idea over the internet and the people watching it raise funds online for the development of that idea. When the product makes profit in the market. All the investors get their share of profit depending on the share of their investment for the product.

2. What did the guys behind the crowdfunding of Exploding Kittens learn about the downside of crowdfunding?

Ans.: The downside of crowdfunding is that, many people invest money in these kind of new card game projects but donot get anything in return. Many a times their money is just stuck and there are no returns because the project gets failed in the market and didn’t do well.

3. Why would a new product developer use crowdfunding? (Explain the benefits.)

Ans.: The benefits of crowdfunding for a new product developer are as follows:

a. Raising the initial funds for the product / the project.

b. Less financial risk, as less investment is involved.

c. Gaining crowd support, by gaining more publicity and attract larger people.

d. Having market validation of your product, if it is liked by the people in the market who are ready to invest.

e. Ownership of ideas is with the owner of the project and only the equity rights goes with the funders. So, the major profit goes with the owner.

4. Go to the Kickstarter website. Are there any products, services or businesses you might be interested in to invest?

Ans.: Yes, AR Kawaii Pet Care. Because, this toy has pokemon cartoon character in it, which is my favourite and has a lot of credibility in the market.