Fund and release

Fund and Release (also called Threshold Pledge) is a system developed to address one of the problems of distributed funding: that before putting up their own money, contributors need to be assured that others are also contributing.

In a fund-and-release system, a would-be creator of a new work estimates the amount of money required to produce the work—this is the "threshold." An intermediary organization collects the pledges from the public, in any amounts. When the amount pledged reaches a threshold (or exceeds it by a standard percentage, assessed to compensate for bookkeeping and assumption of risk), the intermediary signs a contract with the creator. The pledges are then called in. At this stage, with enough money collected to achieve the desired result, the participants are asked to pay up. The money is held in escrow by the intermediary. The creator is then paid according to the pre-agreed schedule established. The last payment occurs on completion of the work, which is publicly available, not just to the contributors. If the creator fails to produce, the intermediary returns the money to the donors.

In a variant, the pledges may be called in by the intermediary at pledge time, with the stipulation that they will be returned if no contract is signed.

References

[http://questioncopyright.org/promise The Promise of a Post-Copyright World] - The source for article above

ee also

*Street performer protocol
*Assurance contracts

External links

* [http://micropledge.com microPledge] - gets software made using the Fund and Release model
* [http://fundable.org Fundable] - A service based on Fund and Release ideas
* [http://strayform.com Strayform] - A for-profit intermediary service using the Fund and Release model
* [http://www.pledgebank.com/ PledgeBank] - An honor system Fund and Release website
* [http://www.LiberateIP.com/ Propagate, Ltd] - A service like Fund and Release combined with additional innovations, but the pledges ("bids") are collected only after work completion
* [http://www.digitalartauction.com/ The Digital Art Auction] - A proposal for a Fund and Release system where pledges represent valuations, and the eventual price paid is the minimum necessary to reach the threshold.