Disadvantages of Crowdfunding
1. Massive Competition: Crowdfunding platforms have grown more crowded, making it difficult to stand out amongst the thousands of campaigns released each day. This high degree of competition can make it harder to recruit investors and meet financial targets.
2. Time and Commitment: Running a successful crowdfunding campaign takes a great amount of time and effort. To assure success, creators must invest significant resources in everything from strategy and preparation to campaign promotion and backer communications management.
3. Uncertain Results: Despite meticulous planning and preparation, there is no assurance of success with crowdfunding. Even well-conceived projects may fail to garner enough backers or funds to achieve their objectives, leaving creators empty-handed.
4. Service Fees: Most crowdfunding sites charge fees to host campaigns and process donations. These costs might deplete the funds raised, limiting the total amount available to the developer.
5. Risk of Overpromising: In order to attract funders, creators may overpromise on what they can achieve, creating excessive expectations and potential disappointment if the project fails to meet its objectives.
6. Intellectual Property Risks: When artists share ideas and prototypes publicly during a crowdfunding campaign, they risk having their intellectual property stolen. Without sufficient protections, competitors or unscrupulous persons may steal or reproduce the concept before the originator has a chance to market it.