How much money can I lose in backing a project?

Every backer should prepare themselves potentially losing money when backing a project. I refer to this as the maximum monetary loss from any crowdfunded project backed. This monetary loss is in addition to any non-monetary risks, including opportunity costs. Let’s take a closer look at how much a backer could lose in a crowdfunded transaction.…

The opportunity cost of crowdfunding

The opportunity cost for backers in the crowdfunding process has a real monetary value as well as a non-monetary value. Key takeaways The monetary value of the opportunity cost is the amount pledged plus any additional income that could have been earned on this amount. The non-monetary value of the opportunity cost is time and…

Does risk only have a monetary value in crowdfunding? No.

In another post, I analyse the maximum loss that a backer could incur in a crowdfunding transaction. The maximum loss has a monetary value, but I think that there is more at stake than just losing $40, for example. The “more at stake” is because crowdfunding is an emotional investment for the backer. By participating…

Risks and rewards of a crowdfunding transaction

A backer in the crowdfunding transaction is often warned “buyer beware”, but it should also be “buyer enjoy”. The crowdfunding transaction can be very risky, with a risk of losing money as well as the opportunity cost and other non-monetary losses. But, the rewards can be very satisfying!