The Risks of Crowdfunding a Gold Rush

While it’s far from perfect, crowdfunding has unquestionably opened the floodgates for all sorts of products and ideas which otherwise probably wouldn’t have seen the light of day. Between sites like Kickstarter, Indiegogo, and Crowdsupply, small groups (and even individuals) are able to put projects into motion that the traditional industry players wouldn’t have touched. Without relying on investors in the traditional sense, crowdfunding campaigns can fund the creation of high-risk hardware and software projects with essentially no penalty for failure.

With the incredible popularity of the Raspberry Pi and Arduino, it should come as no surprise that products either inspired by or based on these devices are hitting crowdfunding sites in huge numbers. Unfortunately these devices are popping up so fast, and with so little oversight, that backing one has become a bit of a gamble.

Obviously, they don’t all end up going south, but there are already a few notable examples of what can go wrong when fast money and high tech collide.

 

Broken Promises

While the idea of crowdfunding products sounds great, the reality isn’t always so rosy. The fact of the matter is that backers are not making a purchase when they pledge their money; they are making a donation. Even after a project has gotten all (or in some cases, much more) the money than was asked for, there’s absolutely no guarantee it will ever meet all the goals originally set out for it, much less get released.

 

The Grossly Misleading

Most crowdfunded projects that end poorly are an honest attempt that simply get sidetracked by all the myriad problems that you run into when trying to mass produce a piece of cutting edge hardware. It’s a shame, but it happens.

Unfortunately, there are some funding campaigns that just look like scams, pure and simple. Either the creators misrepresent the capabilities of their product, claim they are farther ahead in R&D than they are, or even just make the whole thing up.

 

Hopeful Future

But it isn’t all doom and gloom, there are some high quality projects out there that are well thought out and have every indication of going all the way.

The Little Universal Network Appliance (LUNA) from WAW Technologies has recently completed it’s funding campaign and looks to be on the right track; the team already have a functioning prototype and have clearly defined the goals ahead of them. Then there’s the very slick USB Armory, which is currently blasting past its funding goal.

Of course, until the hardware is in backer’s hands, anything could happen. That’s not to say it isn’t worth pulling the wallet out for a well thought out and documented campaign; just always remember that you’re not making a purchase, you’re making a donation with the possibility of a perk at the end.

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