8 Tips on How to Spot a Scam Crowdfunding Campaign
Crowdfunding can be a really wonderful thing. As a creative person short on cash, or a philanthropic person looking to boost someone’s idea. Crowdfunding marries both together.
There have been some really amazing projects funded this way, from cool smartphone gear, to novels and baby toys. You name it, it’s been posted on one of many crowdfunding sites.
My book, HACKING KICKSTARTER, INDIEGOGO, HOW TO RAISE BIG BUCKS IN 30 DAYS (Secrets to Running a Successful Crowdfunding Campaign on a Budget) was created to help sincere individuals … and there are plenty of them out there.
But as you may know, the internet is full of people trying to make a quick buck at your expense. Crowdfunding campaigns are no exception.
Earlier this year over 2500 people pledged support to a campaign that promised a new wristband that counts calories. They raised over $1.1 million dollars, despite not having a working prototype and all the other red flags that swirled around the campaign. And because it was on Indiegogo, they received all of the money up front.
Another fraudster copied this crooked campaign and put on Kickstarter.
Yet another crook put up a campaign for a thermal imaging camera on smart phones without the ability to place on a consumer product for under $5k.
And lets not forget about the 100% Kobe Beef Jerky crowdfunding scam.
So what does a philanthropic do to make sure they are truly helping a genius or creative person fulfill their dream and share it with the world?
1. If it seems too good to be true, it usually is. Do some research of your own to see if it’s possible.
2. If you don’t understand the project, technology, don’t invest.
3. Who are the people behind the project? Research them, look for outside collaboration and make sure they didn’t just come on the scene a month before the project. Do they have a social media presence that has been around for several years or several months? Are their followers fake?
4. Have they posted campaigns before? Look them up on ALL MAJOR CROWDFUNDING SITES. Make sure the information they provided is consistent. One fraudster posted multiple campaigns using different location addresses for each. BEWARE.
4. Do they have an actual product that is working on video? Are they on the video? Now granted, these days they can certainly fake a prototype. But pay attention anyways to see if the product is working and not just showcased with fancy camera angles.
5. When do they promise to deliver? If the delivery time seems very unrealistic for everything they say they have to accomplish before shipping … be very leary.
6. Budget is non-existent or not realistic.
7. Is there a step-by-step plan for accomplishing their goals and what they will be doing with your money?
8. How timely do they respond to questions? Email them from their campaign page with a few key questions. Do they bother to respond? If they do, was it timely and did they address your concerns? If not, move on.
If you think I’ve missed other ways to spot scam campaigns that you would like to share, please comment below. If you have been duped by one, let us know as well.