How not to be fooled by fraudulent campaigns on Indiegogo or Kickstarter
Step by step guide
For many years, Kickstarter and Indiegogo have been the platforms that were supporting inventors and dreamers who desired to change the world. They are still there. But with the growth of crowdfunding trend and raised money, they have been attracting more and more crooks that see in them a simple way of getting easy money in a legal way.
We all know at least one of such fraudulent campaigns. For the last few years the most powerful campaigns were Triton, The Scarp Laser Razor (on Indiegogo), Bleen 3D projector. And all of them have fooled people and stole their money.
Fraudulent campaigns can be divided into two groups:
- Campaigns that are trying to sell something that can’t be build.
- Campaigns that are trying to resell something that has already been made from China market for doubled price. (Like this: Indiegogo , on market)
So how you can check campaign?
1. Check project history
Check whether this project was already published on this platform or some other one. If yes, then look on community and bakers comments and project founders responses. If you see, those founders didn’t answer questions or project was closed by platform, or people saying that this is a fraud, then in most cases it really is.
2. Check author & founders’ bio
You need to check if there are real people behind this projects. Try to find their accounts on Facebook, Twitter, LinkedIn. If you didn’t find anything or their accounts were created few month before the campaign started, then this is a fraud.
3. Check founders expertise in the area of the product
Check the expertise of the founders, try to find how many years they have been working in the area of the product, and what they have already done. What mentions they have, and value in a local community. If no one knows them, or they have bad reputation, or they made something that out of their expertise, then this can be fraud, or just campaign with high risks.
4. Check info from the google search
Check info about the campaign on google search, try different searches like “campaign_name fraud/scam”, etc. The more info you get better. If nothing was found or all seem to be good it’s still not the answer to your question.
5. Ask people with expertise in the area of the product
You definitely have guys who know something from the area of the product, just ask for their opinion. If they say that this is impossible or too hard to make, then you have you answer.
6. Look at the type of funding
The most fraud campaigns are running with a flexible goal. This means that they will get money even if the goal isn’t reached.
Why is this important? Imagine that for the production of product you will need $200 000, to make the cost of it $50. But if you raise only $100 000 then production costs will be much higher, which will raise the product cost to $100. Which means that you just will not have money to cover production of all products that were bought by your bakers.
So fixed goal is a double protection, cause it protect founders from not delivering the product and bakers from paying for nothing.
7. Check media
Most of the projects shows media logos that support them. First of all, you need to look if you see Top10 media there. The second you need to check if really there is the article about this project on that media. If the quality of media is poor, or they doesn’t have mention there, then this is mostly a fraud.
Also, remember that most fraud campaigns have good quality content, so you shouldn’t trust the campaigns only because of this.
You can use our free service with Chrome Extension that will do all work for you: Kudos — First Crowdfunding Campaign Verifier