This approach proved to be so successful that the developer no longer needed to source funds from private investors. Since October 2012, the company has raised more than USD 81 million107. The vast majority of that amount was crowdfunded from the game’s website. Only USD 2 million was raised from Kickstarter between October and November 2012.108 Overall, the game received funds from almost 900 000 people, each paying an average of USD 90.With this kind of fundraising, the investment risk is measured by the likelihood that the project will be completed once the target funding is achieved and by how much has been invested. For this project, the investment risk was measured by the following:• the low minimum investment required (only USD 90); and • the project founder’s strong track record in developing video games.An added benefit for the individual investors was that they could influence how the game was developed based on how much they invested. In addition, investors also had early and free access to the game,109 which was due on the market in 2015110. Financial services regulators do not typically regulate donation crowdfunding. This model corresponds to something like a charitable donation or a non-monetary reward. As a result, it is not seen by regulators as an investment and is exempt from regulation.Case study: Pebble, USA Pebble is a company that develops technology for a range of smart watches that allow users to access apps using connectivity provided by a smartphone. For this value proposition to be feasible there must be good-quality data connectivity.The company is relatively small and lacks the funds needed for product development. During its most recent fundraising session (April 2015), Pebble raised more than USD 20 million from more than 78 000 backers on Kickstarter. Pebble saw Kickstarter as the easiest and most efficient way to market its latest product to the audience most likely to want it. As a result, the company achieved its fund-raising target within three months.The minimum required investment in Pebble was USD 159, in return for which the investors received a discounted price on a Pebble watch – the higher the investment, the lower the price. Backers of the project also received the watch before it was made available to the general public.As mentioned in the previous case study, the intervention of financial services regulators in this type of fund-raising approach is unlikely.32 Trends in Telecommunication Reform 2016 Box 1.14: Key lessons: Star Citizen • Donation crowdfunding is typically exempt from regulation by financial services regulators, and can therefore be relatively straightforward to set up and to attract investors. However, investors should be aware that the lack of financial regulation may introduce risks, and they should be prepared to undertake their own due diligence to assess that risk. • The Star Citizen project was funded using a combination of crowdfunding from a private platform (Kickstarter) and from the project’s own website – thus reducing fees paid to the third party platform. This two-pronged approach can lower the costs for crowdfunding, but the project may lose visibility, particularly if the website is new or not seeing heavy traffic.• Donation crowdfunding is more likely to be successful in developed markets where investors are also potential end users.