I really like the idea, assuming the planned idea is a quality plugin that warrants financial backing.

If it is a commercial plugin, then free copies of the plugin seem like a pretty worthy reward.

If it is a free plugin, then I'm really not sure that rewards are necessary, except for credits to the people that contributed funds.

From the developer's perspective it would make me kind of wary to start out on a plugin with a bunch of investors who then (probably rightly, depending on the terms) feel they have a higher stake in the product features. I feel like it leads to a different feeling of ownership vs. paying for a complete product with a defined existing feature set.

That said, I would probably be willing to contribute up-front to the development of a plugin with functionality I really want. Maybe not a free plugin, but for a paid I think I'd want some extra license terms like an extended license compared to later buyers, or a developer license at single license cost.

I love the idea!

As Pippin suggests a free lifetime subscription for the plugin is a good reward for funding. Also premium support and feature requests would be nice too.

If I can help fund a premium plugin that I know I will use over and over again it would be completely worth it.

Managing expectations will determine success or failure.

I actually registered a domain for doing this stuff about 10 years back and I've run several "bounty" projects. IMO the contributors must very clearly have zero claim on the developer's time and only get the end result. It also needs to be clear if the plugin will be maintained (and for how long) as part of the deal.

I'd say the biggest risks are the pain involved with interacting with lots of individuals that each feel a sense that the developer is "working for them". That and the "If you don't build feature X I WANT A REFUND." crowd.

As Alex mentions, clearly defining the boundaries of what the developer owes the the crowd is key.

I'm also wondering how you would handle already existing plugins that would be in danger of dying because the developer is claiming that they aren't getting enough to support. I can think of plugins within the past year or two (one particular security plugin for BuddyPress) that would fall into this category. Maybe layout a feature roadmap for the x.0 version, get some feedback, and then finalize feature set. And do this sooner rather than later so we don't have ones giving negative reviews.

Personally, I would contribute a bit more to a plugin if the developer decided to release it as open source.

In the same line as Alex's comments, the important thing investors should understand is that they are investing in the developer's vision for the plugin and should only invest if their own vision can be aligned with that of the developers. Suggestions from investors would surely be welcome but not guaranteed to be implemented.

Now for existing plugins, crowd funding could be an interesting way to fund feature development. Let people vote for feature requests with their wallets rather than just a +1. Even in this scenario, however; the developer would have the final say on which features and how they are implemented.

You'll definitely want to trust the developer before you throw your money in a crowd-funded plugin.

I've done this informally for PMPro improvements. Besides not being well organized, it didn't work so well because people didn't want to wait 1-2 months for the results. Certain kinds of plugin projects will work better than others for crowd funding.

I definitely like the idea of crowd funding free plugins. Anthologize recently did this on Indiegogo (indiegogo.com) and it seemed both well-received and successful. Like Pippinsplugins, I'm also not sure rewards are needed, aside from credits somewhere in the plugin.

As for paid plugins, it seems that with some careful planning, it can be a pretty good model since it allows the plugin developer to get paid for the initial time investment it takes to create the plugin. A reasonable amount of money to raise would have to depend upon the scope of the plugin. I can see rewards being either a discount on the plugin, the plugin free for (x months/years/etc.) if it's a subscription, or the totally free for contributors.