Kickstarter funds the future - Telegraph Digital strategy agency Mavens of London described Kickstarter as "a new type of funding that not only completes projects but may also compete with high risk businesses that are normally shunned by angels and VCs." It looked at 27,491 Kickstarter projects that collectively requested nearly $217m and found the total pledged on successful projects was $203 million; an average success rate of 85.62 per cent. Funding for short films had the most success, with 2,287 completed projects while documentaries came second, at 1,772. Interestingly, every project that received was linked to more than 3,000 times on Facebook met its goal, further evidence that crowdfunding relies on social media interest. But not projects are syuited to crowdfunding. Maven reports that the videogame business, which has always been a tricky area because of long development cycles, has the highest failure rate at 46 per cent; and then there are hidden costs. One games developer, Warballoon raised $37,000 to fund its iOS game Star Command, but was left with the less-than-princely sum of $4,000 after taxes, lost payments, legal fees and other costs. Keeping customer expectations in line after the promise of riches can be difficult, as Nicholas Lovell, games analyst at GAMESbrief expains. "What worries me is that it turns out to be really difficult to finish a book, or a game, or a film," he says. Lots of people start, fewer finish. With Kickstarter, you can do the exciting piece - setting out your idea, creating a cool video to describe it, sound cool to all your friends - but then you have to do the long difficult slog of actually finishing it. "This year, and particularly in 2013, I expect to see a lot of projects admitting that they have run out of money, that the people who pledged won't be getting their rewards, and the project won't be completed," he said. It's not all about Kickstarter. Peoplefund.it is a crowdfunding platform launched by Hugh Fearnley-Whittingstall's Keo digital team and backed by the charity Nesta. One of its first projects raised £40,000 in six days for The Bicycle Academy. Other Peoplefund.it projects have had support from Lynne Featherstone MP, Martha Lane-Fox and Stephen Fry. In a short space of time we've had more than 40 projects funded on peoplefund.it. We are passionate about crowdfunding and the benefits it can bring. Crowdfunding is not just about raising money but it can unite people in common goals and bring early stage customers to start up businesses. It's not the be all and end all of raising money but it can be a useful way to fill funding gaps. If you want to raise money you really need a plan - you can't expect to sit back and watch the money roll in - it just won't happen," said Nick Underhill, joint founder of peoplefund.it. Crowdfunding challenges existing early-stage funding systems, according to some of its most passionate advocates. As part of the government-funded Gateway2Investment consortium, the Pembridge Partnership advises and finances company in the digital, creative and tech sectors. It has helped 50 London startups raise £22 million in the past two years and is believes crowdfunding has its place, but not as an alternative to traditional seed funding. Crowdfunding for seed money is not something that is making much of impact in the overall early stage funding arena, I doubt it ever will. Most good management teams want the benefits of mentoring and connections that come with business angel funding," said Andy Tait, Partner at Pembridge. When seeking investors businesses need to look at the whole life cycle of funding, investors should be able to 'follow their money' and also have personal connections to larger scale investors to scale up funding, this is less likely through crowdfunding. So there may be a bandwagon effect here or we may be just living through a euphoria cycle before the inevitable disillusionment stage. For now, however, crowdfunding really is hot.