I don't think the government needs to be involved. But I think the platforms should bear some responsibility for fully vetting the creators of projects. And perhaps they should offer a form of "crowd funding insurance"
Just another reason that crowdfunding needs to be regulated.
I must say that I'm very disappointed. I backed this project after supporting the original triggertrap and assumed that the management had learned from their previous mistakes and experience. Apparently that is not the case. My read of the terms of service does suggest that a full refund is indeed due and I will be asking Kickstarter to make a formal decision on what type of refund is appropriate in this circumstance.
Kickstarter is built around minimizing that risk through all-or-nothing funding, which allows the collective voice of the people to decide which projects reach their goal. On our end, we review projects, uphold our rules (link to kickstarter.com/rules), practice careful governance, and use anti-fraud filtering. The foundation of the entire system, however, is the collective wisdom of the people who back projects.
I don't think the government needs to be involved. But I think the platforms should bear some responsibility for fully vetting the creators of projects. And perhaps they should offer a form of "crowd funding insurance"
Mandatory insurance is the best way, it creates a single party with a claim on the project starters (which keeps them honest) and with a monetary incentive to vet them beforehand (which keeps the crowd funding site honest).
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Crowd funding is a new thing for everyone, they exist in a legal loophole between regulated investments and consumer protection laws. Outright fraud is obviously illegal, but the majority of business ventures fail, even if they are done with the best intention. The general public have no idea about viable business plans.
The problem is one of learning and perception. Eventually people will learn that crowdfunding is quite risky, and is effectively like gambling. Some good quotes from the comments:
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Just another reason that crowdfunding needs to be regulated.
Why? Gambling, poker and stock markets still exist, It's just another way to make or lose money, depending on luck and expierience.
I'm sure some see it as placing a bet. I also think the 1,971 backers learnt something here, and aren't broke.
On another forum, there was a discussion of millennials, and how they are way overconfident and way underexperienced. I've seen that in my own line of work... 20-something people who have spent a year or two working somewhere and believe they are experts at developing products and running businesses.
Does anyone know if the lawsuits over failed projects have ever got any money back? Or is that just throwing good money after bad?
The bit i don't get is that if you have a genuinely commercially viable idea, why do you need crowd funding, and if it isn't commercially viable, how is it going to work just because it is crowd funded??
Civilized society works on trust, so it's important trust is maintained. If people can't play nice, then government will step in.
wait a minute ... if these blokes outsourced everything to the "real" people who actually designed more of it than they did ... then what have they been doing?
Some young people are cocky and overconfident. This is news? No, no, it isn't. That you think it is suggests your own experience, or your ability to learn from it is lacking.
Some older people thing that kids today are X & Y (where X & Y are unfavorable). Also not news.
While kickstarters like this seem like slow-motion trainwrecks, what's the harm, really? So, a bunch of people are out an average of, what $150 or so after refunds are paid out? Yeah, that sucks, and if it were me, I'd feel shitty about it, but, on the other hand, this is a tool for people doing high-speed photography, not exactly a cheap profession or a hobby. I doubt $150 is a very significant loss.
And lets compare kickstarter to some of the other things people spend their money on: Skying: I haven't been in quite a while, but I gather equipment still costs hundreds, lift tickets cost quite a bit, travel and lodging (if needed) add up, and there is always the risk that you'll injure yourself, that the snow will suck, or that the weather is too bad to ski.
This didn't seem like fraud or mania though, just too much foolishness, and to their credit, they finally figured out for themselves that it wasn't going to work, before they ran of money AND they decided to quit, rather than doubling down and refund the remaining funds.
Oh, and back to the topic of experience, or the lack of it. People learn as much from failed projects as successful ones, sometimes more. I don't have a problem with a world where people can raise modest amounts of money from a few thousand people and succeed or fail, and try again.
There's a common way of thinking that "ideas" are much more important than execution. If you have a brilliant idea you can just pay some techno-dweebs to do all the boring work of design, prototyping, testing and manufacturing (which of course is a purely mundane detail) while you pay them as little as possible and reap all the profits of your brilliance
One of the most shocking reality checks for would-be entrepreneurs when dealing with "real" investment capital is that their idea isn't worth shit. There are countless bitter self-titled 'entrepreneurs' out there who feel that the investment world failed them because it didn't recognize the brilliance of their idea and give them millions in VC money for a minority share in their greatness.
If you limit it to people who already know how to do this and have a track record of success, then you wipe out 95% of kickstarter projects and essentially the entire concept along with it.
Kickstarter makes it perfectly clear, legally it's a pre-order ...
There are also those ideas that are worth something. An investor wants to see xM$ in, 5xM$ out (at minimum). There are also truly worthless ideas, but there are also ideas in the 100k$ in, 250k$ out range. Worth of doing, but not with investors. Tough spot if you don't have the 100k and can't give guarantees to a bank. Crowdfunding works in this field. But...
People who already know how to do this and have a track record of success don't need kickstart, they either already have the money or can access cheaper funds. Therefore, kickstarter projects are by definition run by people who don't have the track record. Kickstarter doesn't make it clear enough that you are making a bet, not a pre-order.
The bit i don't get is that if you have a genuinely commercially viable idea, why do you need crowd funding, and if it isn't commercially viable, how is it going to work just because it is crowd funded??
The bit i don't get is that if you have a genuinely commercially viable idea, why do you need crowd funding, and if it isn't commercially viable, how is it going to work just because it is crowd funded??
The only reasons which make sense to me are:
a) a creator (and what a silly term that is!) has a product idea which has been prototyped and debugged and is ready to go into production, but the creator lacks the funds to start the production line (not independently wealthy, don't want to/can't max out credit cards, banks won't give a loan to someone without a track record, whatever), and
b) to gauge whether an idea which has been prototyped and debugged and is ready to go into production is viable. In other words, if nobody is interested in the product idea, the creator won't spend $50K and have boxes of unwanted things lying around the garage.
They should open source and publish whatever they've done to this point.
The funny thing is that in this case strapping some sensors on an Arduino would probably have been all they really need