Public Enemy made headlines in October of last year when it announced it was using Sellaband - a platform that turns fans into investors - to seek $250,000 by the end of 2009 for a fan-funded album and marketing plan.

But by December, the band had stalled at $71,000, or 28% of its goal. Since then the band has lost investors. Public Enemy’s funding currently stands at $67,400, or about $4,000 less than it had two months ago. The fan-funded model may not have been given a black eye from this event, but it has showed some growing pains.

Even though Public Enemy is only 26% to its goal through the help of 901 investors, it has raised far more money and has far more investors than other Sellaband artists. Others have raised more from each donor, however. Public Enemy has raised about $75 per donor. Other well-funded artists have raised more, one over $200 per investor.

Why did the band fail to meet its fundraising goal? The problem may have been that every high-priced option was anchored to a $25 CD and a $10,000 deluxe package with no affordable options between. The second-cheapest option offers a CD, the investor’s name in the CD booklet and the opportunity to buy a second CD at half-price. A fan would understandably expect more for a $100 investment. The $250 investment adds a limited-edition Public Enemy T-shirt to the package, effectively valuing the T-shirt at $150.

Marketing appears to have been another problem. The group needed to sustain the project's initial momentum, but Public Enemy’s updates at Sellaband and funds from investors slowed to a crawl by December. One downside of the service is Sellaband does not have tools to market outside of the Sellaband ecosystem. Without the ability to create and manage email and social networking campaigns from within Sellaband, extra effort is required to reach potential investors.

The goal of $250,000 may have been a stretch. Of the 43 bands that have reached their targets at Sellaband, 35 set a target of $50,000 and one reached €40,000. Other targets typically ranged from $10,000 to $20,000.

Additionally, the past success and public face of the band may have clashed with the do-it-yourself theme of Sellaband. Public Enemy’s Flavor Flav is now well known for a VH1 reality series. Clips from the show are front and center at the group’s web site. Does this look like a group that needs fans’ money to further its career?