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Tech Report: Kickstarter Investor Beware

SAN FRANCISCO (KCBS)— Thousands of entrepreneur's have raised $274 million from the public through the website Kickstarter, but not all the ideas have turned out to be successful and sometimes not everyone delivers on the investments.

The website is used for crowd funding, meaning rather than going to a venture capitalist for an idea, you put your pitch or idea on Kickstarter, explain what you want to do and people would give you money. Typically the money would be given in exchange for a product or a service or some kind of reward once the project was completed.

For example my son, who's a musician, wanted to put out an album, so he had a Kickstarter deal where if people gave him a certain amount of money they would get a download. If they gave a little more they'd get a cd and so on with different increments equaling things of increasing value.

KCBS Tech Report:

Eventually he raised enough money to fund his project. Unlike some people who've raised money on Kickstarter, my son actually delivered his cd and all the other things he promised people.

My advice here is, like anything else, do your homework and read the person's proposal very carefully. Evaluate whether you think the person is going to deliver what they say they are going to deliver. If you have any doubts, put your money somewhere else.

Kickstarter has been a great company in so many ways and a lot of projects have successfully been funded this way.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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