More and more fraudulent crowdfunding campaigns
A selection of the article written by Janet Gershen- Siegel.
" Today, crowdfunding, which allows entrepreneurs to pitch to the grassroots masses, and avoid bank loans and angel investors, has raised $34 billion globally with 191 platforms in the U.S. alone and is expected to grow to $300 billion as an industry by 2025, according to research by Fundly.com.
Any crowdfunding platform will happily tout its successes. Kickstarter links to them on its front page, as does Indiegogo. Crowdfunding even made the movie Veronica Mars possible, with 91,585 donors raising $5,702,153 on Kickstarter back in 2013. And yes, people use crowdfunding all of the time for personal reasons like travel expenses, funds for weight loss programs and skin tightening treatment, and help with legal bills for divorces.
But there’s a nastier underbelly to crowdfunding: Fraud. Fraud occurs when a business fails to deliver promised gifts to donors (or those gifts turn out to be just plain lemons) or when donor money is misused. State and federal authorities are starting to get wise and catch up to crowdfunding abuses, but in many respects, the industry needs a new sheriff in town. "
A selection of the article written by Ashlet Carman: The Federal Trade Commission might have a renewed interest in justice for crowdfunding backers. Emails seen by The Verge show that the agency is investigating at least one crowdfunding campaign gone bad — the iBackPack — which raised more than $700,000 across both Indiegogo and Kickstarter.
The backpack’s creator, Doug Monahan, marketed the device as a Wi-Fi-enabled, battery-packed backpack that would power gadgets on the go and provide a local hot spot for wearers’ friends. It launched on Indiegogo in 2015 and Kickstarter in 2016. Years later, the backpack has yet to ship, although some backers did receive “beta” device accessories, like batteries and cables, some time ago. Monahan’s two previous campaigns never reached their funding goals, but they were eventually used to market the iBackPack.
These backers tell The Verge that an FTC agent began reaching out to them this week in an effort to research the campaign. The emails all say the same thing:
These articles all tell the same story! If nothing is done to prevent more people being scammed by dishonest and criminal campaigners the crowdfunding market will suffer and less and less people will want to support good and honest campaigns.
Its good that the federal trade commission is investigating this and crowdfunding platforms are asking more information about the campaignes before they can activate their campaign, but in the end there are many more smaller fraudulent campaigns that go unnoticed like Hypar Kayak of 2017 - a foldable kayak which is scam of Sviatoslav Gerasymchuk. He raised $50,000 euro and hasn't delivered a hypar kayak since.
Many crowdfunding backers will also have similar experiences.
But no more that's why we introduce the quality mark for crowdfunding to be able to ensure the succesful raising of funds for good and honest crowdfunding campaigns. Apart from advice we can also assist in managing the campaign with our team.
The crowdfunding campaign to raise a small working capital to get started will be launched shortly on Indiegogo.
David Berg Crowdfunding Agency