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Crowdfunding platforms have long been a questionable way for tech companies to raise capital for research and development or new project ideas that haven’t been tackled by the big players in tech. (Usually for a pretty good reason.) They’re often seen as something of a gamble since there’s no guarantee that you’ll get the product that was pitched in the time frame that was stated.
Kickstarter took the bold move of banning renders from any of its hardware design categories. Instead, project creators must provide photos of the prototype as it exists in the current stage of development. Indiegogo had no such requirement before now, which is why a thing like the frank phone has popped up on the service.
In response to some of the criticism surrounding this project, Indiegogo has made some changes to the way it handles projects going forward. First up, when tech projects launch they need to disclose what stage of product development the idea is in.
We’re proud to help entrepreneurs wherever they are, but we understand that because every project is different, determining the risk associated with it can be challenging, especially if you’ve never done it before. Our goal is to give you the context you need to make a more informed decision before backing a campaign.
Secondly, Indiegogo is hoping to crack down on vaporware projects by requiring the team to send monthly backer updates to those who pledged to fund the campaign. Most interesting is that Indiegogo says it will even use collection agencies to go after project creators who don’t deliver and violate the Terms of Use.
We can’t make any promises on behalf of the entrepreneurs on our platform, and we can’t guarantee that every incredible idea will come to life, but we’re doing everything we can to help with any challenges that come up. In the rare occasion that our Terms of Use are violated we will even use collections agencies, but we hope that we never have to.
This is an interesting change to the Indiegogo platform that should make it more competitive with Kickstarter, since it’s becoming a more backer-friendly site. What do you think? Will this make you more likely to pledge to a product on the site knowing these policy changes are in effect?
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