Crowd Supply makes official policy to pay project creators early
Crowd Supply launched last month as the first marketplace to combine crowdfunding with product development, allowing project creators to fully capitalize on the high level of interest that they initially generate with backers and early adopters, taking the product all the way to delivery, even handling warehousing and fulfillment. In their first week, over $40,000 was raised on the fledgling site.
Shortly after the launch, the company has made official an early payment policy for project creators, releasing backer funding as much as two months ahead of Kickstarter and others the require project creators to wait up to 30 days after a successful crowdfunding campaign ends to receive any of the funds, which many have complained set their project timeline back, giving pledges a bad impression as they are increasingly delivering products later than their projected date.
You can’t time the creative process
Kickstarter defends their process, stating that “We at Kickstarter know quite a bit about lateness ourselves, funnily enough. Our original plans had Kickstarter launching in April 2008, but a variety of obstacles delayed the launch an entire year. Does this delay make Kickstarter a failed project? We hope not. Ultimately the creative process takes as long as it has to take.”
Crowd Supply said, “This may be an appropriate position for artistic projects, but for most high tech consumers, the statement is preposterous. For project creators that are designing compatible accessories for popular electronic items like smartphones, time is always money. The short product life of these consumer electronics products requires a time-is-of-the-essence approach to all aspects of product design. ”
According to a CNNMoney study, fully 84 percent of all Kickstarter projects ship late, which Crowd Supply says puts creators at a disadvantage before their funding campaign is even finished.
Funding and timing is critical
“Historically, one of the main shortcomings of crowdfunding platforms is the inability of creators to complete high-demand projects on time,” said Lou Doctor, co-founder and CEO of Crowd Supply. “Projects that reach their funding goals early in their campaigns are often generously overfunded. Then, due to the unexpectedly high volume of interest, creators end up struggling with fulfillment and deliver late. On Crowd Supply, when a project reaches its funding goals early in its campaign, creators will receive funds to immediately jump start their development. Overfunded projects on Crowd Supply will have a much better chance of staying on schedule.”
Backers’ pledges are processed immediately after a Crowd Supply campaign reaches its funding goal. Five business days later, funds are available to project creators. In the case of a 60-day crowdfunding campaign, creators could possibly see their funds much as a full two months ahead of other crowdfunding sites. “For those developing products where time-to-market is important, that difference is critical,” Crowd Supply notes.