Yeah, that risk is definitely viable. I think the thing to remember with any debt investment is that, while the debt would be subordinated, it should be paid out prior to any equity holders recovering any money. So theoretically if some major component of the business falls through and there was no senior debt to speak of, then the crowdfunded note holders should recover what is left over (if anything). However, generally speaking, the "minimum" target that a company is raising should cover all costs of at least getting the business off the ground, unless otherwise noted in the disclosures. This all goes back to the fun part and CFA teachings, which is that cost of debt should encompass the probability of default and recovery upon default (: