There has always been a considerable risk involved whenever people get involved in crowdfunding campaigns as contributors or investors. Crowdfunding can be risky, because there are many cases when promises are not delivered on. We have recently heard stories of an official crackdown and experts being brought in by the larger crowdfunding platforms. To create more security and success in crowdfunding campaigns. So if you are considering pledging money on a campaign, here are some things you should consider before getting involved.
It would be always wise to perform your own due diligence. If you invest time in research, it will lessen the chances of you pledging on something that will be unsuccessful and end in failure. Some projects will go wonderfully and others can simply fall of an cliff, leaving you with nothing.
1. Dig deep into the project creator’s profile and background. See if they have an good history and if they have ever tried crowdfunding in the past. What have they achieved so far in their lives.
2. Check their presence online. Are they very active on social media and marketing their products? Are they investing any money in marketing? It will tell you a lot about the individual or the company behind the product for example.
3. What kind of policies are being offered by the creator in terms of refunds. Is the platform liable for anything? Make sure to the read fine print, both in the platform’s perspective and the individual campaign.
If you do your homework well, it can greatly reduce the risk. However take note that projects can still fail, even in the last stages as products for example are being delivered to your door. If you do end up pledging, follow a few of points mentioned. It is great to see projects come to life and people providing support throughout the campaign. Crowdfunding has done so much over the years and it can certainly do so much more. It will continue to evolve and get better each year.