CROWDFUNDING has been touted as a mechanism for artists and other creators without access to ready cash, big donors or bank loans to obtain modest to immoderate sums of money designated for specific projects. Of the nearly 95,000 projects completed at Kickstarter, 41,000 of them reached their goal and thus received funds (before fees) of $517m as of May 14th. Most projects are modest in scope, with 90% receiving less than $20,000. Some outliers, such as the Pebble watch, have raised millions, but even Kickstarter's larger sums are typically raised by those with niche audiences or compelling new products. Recently, however, true celebrities have jumped in. Rob Thomas, the creator of the "Veronica Mars" series, raised a tidy $5.7m to shoot a feature-length film with its original cast; Warner Brothers owns the programme's rights and will distribute the film. Actor Zach Braff has raised more than $2.6m so far for an independent film he will produce. This has prompted an online backlash as to whether such high-profile uses constitute an abuse of crowdfunding's tradition of helping the little guy. One columnist admonished readers, "Stop Giving Your Money to Rich People on Kickstarter". Such critics say celebrities will capture a disproportionate share of crowdfunding, driving out the lesser known and proving Clay Shirky's power-law distribution curve all over again. Is it unfair for famous people to use Kickstarter?
Reward-based crowdfunding, the kind in which Kickstarter, Indiegogo and several more specialist sites engage, promises no return on investment. Rather, a donor is a "backer" who expects to receive a specific reward, usually based on the sum committed. Each campaign on these sites is disconnected from all others (except those by the same creator), and functions almost as a limited-term company with a dedicated purpose. The sites do not provide marketing tools to reach existing registered users. Rather, project creators must find their audiences and bring them to the campaign through direct appeals, press coverage and social networking. A dance troupe with an e-mail list of 1,000 previous attendees seeking to raise $5,000 for an upcoming performance has to use the same tools as a moviemaker seeking 100,000 donors to raise $5m for production costs. So when it comes to attracting attention to a crowdfunding project, being famous can help enormously.