So weird to see people complaining about the risk of people half-assing projects on kickstarter because of getting money up front with little assurance. As if angel investing is much different.
A professional angel (and certainly VC) is a lot less personally pissed off at losing $25-200k in an investment than a purchaser of a product is at not receiving a $25 product. Courts are also much more sympathetic (rightly) to the individual consumer than to an investor in this case, so that $25 loss (x 1000 people) could turn into a huge judgment against Kickstarter, etc.
That's not really true under US law. US consumers are legally privileged over vendors or business to business transactions -- the only more privileged party is the Government.
Kickstarter was/is shooting for the investor-style model.
The problem is that people were viewing it as a store. People were getting pissed off when they gave money to a scam, to an individual who couldn't handle the explosive demand, et cetera.
