Useful Tips on How to Avoid Crowdfunding Scams
There is a lot of uncertainty when it comes to crowdfunding. Indiegogo and Kickstarter might appear and feel like online stores, but you are not certain that you will get returns for the cash you pledge to a campaign. A lot of the crowdfunding sites only need that the people creating them provide some assurance that they will deliver on their promises. Therefore, they cannot be held accountable in case their project does not meet its deadlines or even deliver.
Between the funding of a project and the delivery of the results, there are numerous things which could go wrong. The one creating the project might have miscalculated the time they require to complete the project. Manufacturing problems might lead to long delays while a few projects might fail because their owners got a lot of funding which they mismanage. Other times, things go wrong in spite of the best efforts of the creator of the project. Hence, any crowdfunding project always involves an element of risk. But, below we discuss some tips that can help you in making smarter choices when supporting crowdfunding projects.
Some ideas are much easier to implement than others. When you see a creator asking for funds online for their project, you have to assess the idea carefully to see if it is easy to implement. Search for real pictures of the actual product. You should be careful if all you observe are renderings of the product. If you note that the project is complex, there is a higher likelihood that it might fail. But, this should not be the only factor you use to assess the validity of a project as the most complex crowdfunding projects are the ones that are most exciting.
Another pointer is conducting the creators of the project. If you will be giving someone your hard-earned money, you should find out more about them. Click on their profile on a social media website like Twitter or Facebook. If there is no information about them online and they do not have any company or personal profiles, then you should not invest any money into their project. You will know a lot about an individual in case they are not transparent. It is hard for them to be accountable in case the project fails if they are anonymous. On the flip side, in case the creator of the project reveals their personal information online, it shows their assurance and that they are ready to risk their reputation.
After assessing their personal information you must then find out more about what they achieved in the past. You can learn if the creator will finish the project promptly if you learn about their past successes. The likelihood is high that they will succeed on a new project in case they have developed or manufactured something in the past.