Or, caveat emptor always applies.
If you’re at all like me and follow the crowdfunding world with a sense of excited curiosity, then you can’t help but to have noticed the crop of “how not to get scammed” articles littering the tech writing world in the wake of the FTC ruling over a known Kickstarter based fraud. I think the thing that surprises me the most about all of this is the apparent naivety it seems to reveal about the crowdfunding world.
Don’t get me wrong, because I don’t think even most crowdfunders are naive. Rather, I think enough of them are that their collective outcry when a campaign fails or turns out to be a scam gets a lot of attention. And that attention seems to come from the fact that not a small number of people think the crowdfunding world is somehow immune from the risks that have attended all ventures since the beginning of mankind.
Quite to the contrary, crowdfunding is its own unique kind of risky venture because it lets anyone who wants to help incubate ideas that other forms of venture would never would probably never let see the light of day. It democratizes the incubation of ideas, and as anyone who has paid attention to democracy will note, it’s a messy, error-prone process.
So, yes, crowdfunding efforts are going to fail. Even ones for great ideas. Scamsters are going to succeed in separating people from their cash. Even seasoned venture capitalists fall for that (Dot.com bubble or Enron anyone?). Neither of those facts make the process bad. Rather, they reveal crowdfunding has risk. If that bothers you, don’t participate.
As for me, I take the risk because I enjoy the potential outcome. That’s worth losing some money once or twice, because the potential reward so often outstrips the risk.