Project Developers’ Perspective
- Reward-based crowdfunding has not been applied in the geothermal industry yet.
- There is a risk that investors are not satisfied with the realized reward.
- There is also a reputation risk concerning the treatment of the crowdfunding investors.
- A potential second round of funding may not be filled if the reward offered is not as expected, e.g. the geothermal wells deliver less water and temperature than anticipated.
- If a geothermal project does not deliver as much energy as originally planned, the project developer might have to buy the energy elsewhere to provide the promised rewards to the community.
- It is difficult to raise high amounts of funding through this usually very local method.
- It is recommended to research upfront what the potential reward-based crowdfunding investors are interested in most.
- Communication is a key element for this form of usually very local crowdfunding.
Community Investors’ Perspective
- For the community investors, there is a risk that the reward is less than expected. In case the project fails, it can even be worthless or nonexistent.
- In the case of project failure, the investment will not be repaid.
- It is recommended to only invest money that can be missed and is not needed for own expenses or on the short term.
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