• Michael Weeding

Crowd scammed

If you have an idea Crowdfunding is a perfect place to get some money to turn your dream into a reality. Where else on earth where you can solicit money from complete strangers and keep the profits even when you don’t meet your goal. So do more people get screwed over with Crowdfunding than get any rewards?

If the two major Crowdfunding platforms Kickstarter and Indiegogo take no responsibility for vetting campaigns to check their authenticity who is protecting the consumers from the scammers?

You of course! If you are going to throw money at someone you might want to make sure both the idea and the person is legitimate.

The good news is that while the Crowdfunding platforms do not ensure that products are delivered the creators themselves are still legally obligated to make good on their promises. Last year Washington State Attorney General filed the first consumer protection lawsuit involving crowdfunding, although I would not be relying on action like this to save you from all the scammers.

There is a view that it is not the scammers you need to worry about but the speed at which projects are delivered. Ethan Mollick, a professor at The Wharton School, found that more than 75% of non-equity campaigns are late delivering on their promises, driven usually by the inexperience of the founders.

So when you are next considering funding initiatives like Kobe beef-based jerky you might want to do your homework and then not hold your breath waiting for your reward.

#crowds #crowdfunding

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