Crowdfunding social ventures

Liam and Peter have a post up on the Nesta Impact Investment blog asking whether crowdfunding can work for social ventures. It’s a very good explanation of the issues you might face if you’re thinking about doing it.

We’ve just watched Fairphone do incredibly well by using crowdfunding for pre-sales but I have to admit I’m a bit sceptical about equity crowdfunding at the moment. Ownership is a about much more than raising money. When you’re very early stage you need a very trusting relationship with your investors — one that can’t really be codified in legal speak or a set of terms and conditions — and I worry that’s difficult if you have a large group of investors with different motivations for backing you.

Having said that I don’t have direct experience of a startup that has done it yet — maybe my opinion will change if I get the chance to see how it really works.
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