A friend explained to me all the reasons for her upcoming Kickstarter campaign. The machine she wanted to buy was sorely needed, it would increase her productivity and also make her day significantly easier–it made perfect business sense.
These are all great reasons to borrow money from a bank or a professional investor. They aren't good reasons to crowdfund.
No, the right question is, "how will the new financial relationship I offer to my biggest supporters enhance their lives?" There's a huge amount of emotion and story we tell ourselves before we send in money to crowdfund something. Almost none of it involves how it will help the organizer's business goals.
For many hammer-wielding entrepreneurs in search of money, crowdfunding looks like a nail. But we're seeing again and again that engaging directly with fans and friends in this way is more about connection and the audience's role in making a difference than it is about cash.
[Also on this topic.]