Kickstarter Looks to Improve Responsibilities of Backers
Crowdfunding has taken off in a big way over the past year, with thousands of projects and businesses gaining investment from regular Joes like you and I. It's a welcome break from the traditional funding avenues of angel/venture funding, or God forbid dragging yourself onto shows like Dragons Den!
Kickstarter has been at the vanguard of the crowdfunding movement, but there have been concerns raised over the seemingly small level of responsibility between funder and fundee. After all, the movement would slowly unravel if the expectations of the funders that the projects would be completed as promised were not met. If fraudsters took to the platform with no intention to complete a project of any kind, the crowdfunding movement would quickly fall apart at the seams.
So Kickstarter have responded to these concerns today with new guidelines to offer added protection against such fraud. The new guidelines require creators to provide full disclosure of any risks and challenges the project may face. These include things like production delays or escalating costs.
Kickstarter hope that these changes will allow potential investors to gain a better understanding of the viability of the project and whether it's likely to be completed as promised.
In addition, they have also announced new guidelines for hardware and product design projects. Creators will now not be permitted to use simulations or design renders to illustrate to investors what the completed product will look like.
In an attempt to improve reliability creators will instead have to post photos of prototypes to show how the finished product will function.
Other projects, like the much anticipated Pebble smartwatch, have fallen behind schedule, with backers still in the dark about when the finished product may arrive. In more extreme cases, like the Cam Crate, backers have gone months without any form of communication from project creators, leaving them with cash out of pocket and empty handed.
While the company's new guidelines may help safeguard users from backing risky projects, they provide no further protection to users after they have already made an investment. It's unclear if Kickstarter has plans for more policy changes, or if it will leave backers to fend for themselves.