Skip to main content

Crowd-funding Remains An Unregulated Mess - Don't Get Caught Out


Crowd funding isn't always a disaster, fraud or run in bad faith, but the lack of regulation and the number of projects which fail despite meeting their funding targets should be fair warning: don't put your hand in your pocket unless you're prepared to write off your money completely.

There are so many examples of fraudulently run projects which made their originators a tidy sum of money and left backers with nothing that you have to feel projects which deliver what they promise make up a tiny proportion of those that pitch.

With good reason too. A well thought out project that has a realistic funding goal, well-managed business case and project plans; and team members experienced in taking a prototype into full-scale manufacturing, will have no problems getting funding through regular channels.

A crowd-funding campaign generally says to me that the creators weren't able to satisfy the requirements for normal finding and are therefore relying on you, the potential backer, to fund the route to manufacture and assume all the risk.

Even high-profile tech bloggers aren't immune. Former tech journalist Robert X. Cringely - real name Mark Stephens is currently taking some heat on his blog after running an unsuccessful campaign to fund standalone Minecraft servers. 

Whoever runs the failed campaign gets away scot-free in almost all scenarios. Small wonder that fraudsters are drawn to the service. They're unlikely to even get a ban from the service, much less face prosecution.

The answer to all of this is simple: if it looks too good to be true it probably is too good to be true. Don't fund campaigns. By their very existence you know haven't been able to meet the requirements of traditional funding. If the pitch you're seeing is good enough to get your credit card out, why not the banks or VCs? Did the campaign fail the additional scrutiny?

At least VCs get rewarded with equity. You my friend get the same product that's destined for the shelves, with maybe a trinket to make you feel connected (best case) or nothing at all but the scorn and pity of others who were more intelligent with their cash.


Popular posts from this blog

F1: Robert Kubica Impresses In Renault Test Run

The car may be old but its the performance of the driver that's the story here. Robert Kubica returned to F1, after a fashion, earlier this week with an extensive test run in a 2012 Lotus Renault F1 car at Valencia.
The age of the car and the circuit were likely determined by F1's current rules which ban testing, but the reason for Kubica being in the car is far more interesting. Considered by many to be a potential World Champion and certainly one of the fastest drivers of his generation, Kubica's F1 career seemed to be over after a 2011 crash whilst driving in the Rally of Andora. His Skoda Fabia was penetrated by a guardrail in the high speed accident partially severing his right arm.
Up until last year Kubica has been competing in rallying, with the expectation that the limited movement in his repaired arm would prohibit a return to single seater racing.
So this week's test is both interesting and confusing. Interesting because Kubica completed 115 laps of the ret…

F1: Robert Kubica's Williams Test Asks More Questions Than It Answers

Comparing driver's times at a tyre evaluation test like last week's Abu Dhabi event is difficult at the best of times, but when trying to assess the performance of a driver who has been out of the sport for six years, that difficulty level is raised even higher.
On the face of it Robert Kubica's test for Williams was a success. Fastest of the three Williams drivers present the headlines look promising. However, taking into consideration the different tyres used to set those times muddies the water considerably.
Kubica ran a three lap qualifying simulation on the new 'hyper-soft' tyre - which should have given him a two-second advantage. Correcting for tyres it would appear that Kubica was significantly slower than Sergei Sorotkin - who was on the harder 'soft' tyre - and marginally quicker than Lance Stroll, the team's only contracted driver.

Stroll's family fortune currently funds Williams, so there' no chance that he will be anywhere but in a…

Panos Panay's Defence Of Microsoft Surface Hardware Sounds Eerily Familiar

This weekend I went out with my ten year old daughter to select a laptop for her school year beginning in January. The schools requirements are quite specific, requiring a Windows 10 device, with a preference for a touchscreen and a stylus. She chose a Surface Pro, after trying a large number of different options. Having seen the way I use my own Surface Pro - and tried it herself there was only ever going to be two options - and the other was a Surface Laptop.
I tell you this so that you understand I am a buyer of Microsoft's products through choice, not compulsion. I'm on my third Surface device now. 
So when Panos Panay dismissed reports of the death of the Surface hardware line, I was very interested to see exactly how strong these denials were. Especially how they reflect what has gone before. To whit: Windows 10 Mobile.
Panay claimed that Microsoft is in hardware for the long haul. Almost exactly mirroring the words of Terry Myerson, when he claimed Windows Mobile was g…