The world is now on the Verge of evolution into the future. Technology is transforming people’s life to a greater extent. With more and more advancements in technology more innovative products or evolving to provide better solutions.
These technological advancements have given birth to many start-ups that have now become synonymous with success. The success is so high that the dorm room ideas were now the biggest game changers and global leaders. The best instance to support the above statement is the rise of Facebook and Uber.
These were started as just a small idea inside a nerd and are now dominating the world with their innovative solutions and technology.
One noteworthy fact is that the founders of these startups are not at all born rich neither they had huge chunks of cash to give shape to their ideas.
Yes, what you heard is right? If you have an innovative idea inside your brain which is accompanied by significant perspiration to shape it out then will never be your problem.
All you need is firm determination to build the next big product.
One of the best method to raise funds for your startup is Crowd Funding.
If you are not aware of what exactly is crowd funding then here is a short introduction to it.
What is Crowd funding?
Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people. Crowdfunding is a form of crowd sourcing and alternative finance.
To simplify things, you raise money before you launch the product. This fund would help you to build your product. Thousands of start-ups seek the crowd funding way to raise capital to their start up. These are now enjoying success with the help of crowd funding community.
They were able to deliver unique and innovative solutions to their backers in time and is just because of the faith their customers built on them.
There are several successful stories and here are some of them.
Story of PowerUp
The MacBook Charger that does more which offers a unique solution to Mac users with the revolutionary design. It raised 605 % of its initial goal to build the product. Well now with the funds they have, they can explore more ways to deliver the product.
It is just one example, and there are thousands of success stories that are to be worth hearing.
There are several platforms to raise crowd funds. Indiegogo, Kickstarter and Wishberry were few among them.
One question that struck my mind while I was case studying the projects on these sites was that what if the crowd funding goes wrong? What if the funds were misused? Does every project deliver it’s word to its customers?
It is quite common to have such thoughts before backing a project on crowd funding sites. But what were the answers to the above questions?
Well in most of the cases these projects will be committed to their goal and deliver products to their customers as promised. The crowd funding platforms take all preventive measures to ensure security to backers.
But when things get flipped to the wrong side one can’t expect the outcomes. Recently I came across a case wherein a company named Platc, that promised to build a universal payment card that would help you to carry a single PAN card sized payment card that would reduce the hassles in maintaining several of credit and debit cards.
It promised to offer a unique solution and had raised nearly 10 million dollars through crowd funding And has now filed for bankruptcy. 10 million dollars is an enormous amount of money that can’t be ignored. It is just one instance, and there are many other such cases.
One of the most important thing that is often overlooked is how these sites handle the legal affairs when crowd funding goes wrong.
It is unclear about their actions on such incidents.
Lessons to be learnt
Every startup must be serious about their product and must work according to a timeline. The whole process of crowd funding depends on faith. So as a startup it is most important thing to gain customers faith. It is a thing that can’t be build again.
And for the sites like Kickstarter and Indiegogo there should be some way to support backers when things go wrong.
When I browsed these sites, I noticed that there isn’t a way to report if things turn out. In my opinion, there should be a way to flag fake projects. This is something that should be implemented to build faith among both pledgers and startups because crowd funding is being used an alternative form of financial help for specific causes which were in need.
Above is a Guest Article by Sachin Nayi, a professional-blogger from New Delhi, India
[Top Image – Shutterstock]