Information provided through crowdfunding can lower cost of capital: To the extent that crowdfunding generates more information than tra- ditional sources of early-stage capital (e.g., interest from other investors, ideas for prod- uct modifications and extensions from potential users), this information may increase funders’ willingness to pay, thus lowering the cost of capital. For example, despite the negative reaction Pebble creator Eric Migicovsky received from traditional early-stage investors, the information conveyed via the crowdfunding community’s strong response to his product validated his hypothesis that a wearable device with that particular de- sign and set of features would have broad appeal. This information likely lowered his cost of capital. However, in principle, the same effect could be achieved without crowd-funding by pre-selling the invention and then presenting the sales information when raising capital through traditional channels. Furthermore, if the additional information is negative relative to expectations, then this may work in the opposite direction and increase the cost of capital