The crowdfunding industry is hitting its stride. Kickstarter announced recently it has topped $1 billion in pledges for its rewards-based opportunities, and peer-to-peer lending leader Lending Club is preparing for its IPO.

The potential impacts of crowdfunding on the economy and entrepreneurship are staggering. But while rewards-based crowdfunding provides the lowest cost capital a company can raise, not everyone is a winner in this finance model. As Korstiaan Zandvliet, founder of Dutch crowdfunding platform, Symbid said: ”Isn’t it a shame that some of the companies funded through [rewards-based] forms of crowdfunding will go on to make large profits, and all you ever got was a t-shirt?”

Published in Advice & Tips