Because of how crowdfunding sites display projects, it isn’t immediately clear that all projects can be classified as either a charitable or business project. This can be represented as follows:
Accordingly, crowdfunders, or backers, can be classified as one of three types:
Backers for products, services and charitable causes share typical characteristics.
Retailers are a relatively stand-alone backer category and are driven by a different set of motives aligned to running their retail business. The presence of retail backers may actually influence individual backers when considering a project.
A comparatively smaller number of projects fall into the charitable / causes category, and as a backer for these projects, I encourage you to understand the implications of backing a charitable / non-profit project via a crowdfunding platform.
The majority of projects listed on a crowdfunding site, such as Kickstarter, falls into the business category. This is also known as rewards-based crowdfunding. Accordingly, as a backer for a product or services, you are, in fact, a backer for the business – an early adopter and innovator for the business. Being a backer for business is fully explored in this site, starting with 10 considerations you need to weigh up before becoming a backer. The information is based on my own Kickstarter portfolio and personal research.
Use this questionnaire to help you understand whether you are ready to be one of the three backer types.