How Established Businesses Can Benefit From Crowdfunding
Call it crowdfunding 2.0. Established companies are using Kickstarter and the like to launch new products, paid for by a built-in customer base before they hit the production line.
By Vanessa Richardson •
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Paul Fulton could have easily turned to his Silicon Valley connections to help bankroll a new product from his startup Cloudsona, which makes and sells wireless wristbands that synchronize with light shows at concerts, clubs and sporting events. The man knows people; he has held top positions at Compaq and 3Com and worked as an entrepreneur-in-residence at the Mayfield Fund before founding a software company that was later sold to Cisco. But to fund and launch Cloudsona's latest product, Fulton turned to Kickstarter.
Cloudsona's crowdfunding campaign asked for $75,000 to produce Wave, a wristband and smartphone app that uses color codes to indicate who's calling or messaging the phone. Kickstarter contributors who pledged $28 were promised first-production units of Wave; those who pledged $8,000 got the VIP package--special treatment at a Las Vegas nightclub, complete with limo, bodyguard and a hotel room on the Strip.
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