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DailyDirt: Avoid Crowdfunding Scams
from the urls-we-dig-up dept
Some crowdfunding projects are really impressive and have gotten a lot of attention and praise that is well deserved. However, there are also quite a few projects that haven't quite lived up to their promise. It's disappointing to say the least when a project gets over a million bucks and still fails to deliver a working product to its backers. Some backers get upset when their favorite crowdfunded project sells out to Facebook. How can companies like Kickstarter and Indiegogo and the like deal with these problems? There might be escrow schemes or insurance policies that could help, but in the end, it seems like buyer beware is the ultimate answer. Here are just a few links on this situation of dealing with crowdfunding disappointments and outright scams.
- Indiegogo is trying out an optional insurance feature that would provide a refund if the project fails to deliver its product within 3 months of its estimated delivery date. So far, this insurance policy is in testing and costs $15, so it doesn't apply to every (or even many) campaign on Indiegogo, but it's an interesting way to provide backers with some kind of guarantee that their faith/money is not being completely misplaced. However, it looks like only 3 people have tried it, and we'll have to wait until early 2016 to see if those folks will qualify for a insurance claim. [url]
- Kickstarter is generally seen as dominant crowdfunding platform, and the company behind it wants to be known as a responsible corporation. Will being named a Certified B Corporation boost Kickstarters reputation at all? Or will its certification simply be taken away if more backers are dissatisfied when projects don't deliver as promised? [url]
- It's not hard to find crowdfunding projects that just won't work.. because physics or the second law of thermodynamics. Maybe crowdfunding platforms need to crowdsource some peer review for a project approval process? [url]
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funding scams
Another lets rig the game.
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Re: funding scams
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Some are outright scams. Some are really just marketing operations, either for a product already made by someone else or for long-established companies that already have easy access to capital.
The rest seem to be "give me money for my sideline hobby/business and I'll send you a T-shirt". Catering and cake baking are typical examples.
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Re:
It *generally* works pretty well, with the occasional failure (to be expected,) game turning out to be rubbish, or outright scam (Areal etc.) - I've backed a fair number of projects, and haven't had many issues. Only a single failure to finish, and Elite Dangerous' bait and switch (so far, touch wood.) Not a bad record.
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Like anything else, the fact that crowd-funding (currently) works fine most of the time will tend to get over-ridden by the rare headline-grabbing exceptions. Hopefully crowd-funding won't follow the same rise and fall as hitch-hiking or Halloween trick-or-treating.
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