The cost/benefit ratio for the population of potential projects is bimodal. They’re either so attractive that they have no trouble seeking donors and executors via normal Kickstarter, or so unattractive that they’ll fail to secure funding with or without a DAC.
Even if DACs were normal, Bob the Builder exposes himself to financial risk in order to launch one. He has to increase his funding goal in order to compensate, making the value proposition worse.
For these reasons, it’s hard for me to get excited about DACs.
There is probably a narrow band of projects where DACs are make-or-break, and because you’re excited about them, I think it’s great if you get the funding you’re hoping for and succeed in normalizing them. Prove me wrong, by all means!
I think DACs face two challenges.
The cost/benefit ratio for the population of potential projects is bimodal. They’re either so attractive that they have no trouble seeking donors and executors via normal Kickstarter, or so unattractive that they’ll fail to secure funding with or without a DAC.
Even if DACs were normal, Bob the Builder exposes himself to financial risk in order to launch one. He has to increase his funding goal in order to compensate, making the value proposition worse.
For these reasons, it’s hard for me to get excited about DACs.
There is probably a narrow band of projects where DACs are make-or-break, and because you’re excited about them, I think it’s great if you get the funding you’re hoping for and succeed in normalizing them. Prove me wrong, by all means!
Why do you believe so?
No, he gets compensated for the increased risk by the increased probability of funding. There’s no need for him to increase the funding goal.