Indiegogo Introduces Guaranteed Delivery That Could Kill Crowdfunding

Any interesting project, when it reaches a certain stable level of work, certainly falls into the field of vision of a large business and begins to commercialize, change in order to generate more and more profit. It seems that something similar awaits the sphere of crowdfunding, from which, after the implementation of the new Indiegogo initiative, the most daring and extraordinary startups may disappear.

The innovation is called "guaranteed delivery" and is introduced in order to eliminate the Achilles heel of the whole concept of crowdfunding - the authors of startups de jure do not bear any responsibility for the funds raised. Yes, they risk their reputation on a particular site, but this will not refund funds donated by users in the event of a deliberate or accidental startup failure. The Indiegogo management decided that it was time to do the exact opposite and added a refund rule in case of a project failure, for which they are initially frozen in the account.

From the side of users, everything looks fair and reasonable - they invest in a startup, and after the specified period they receive either their product or a refund. Such is the simple guarantee. And from the standpoint of developers, this is a death sentence to all undertakings. After all, it turns out that the money collected on Indiegogo cannot be used for a direct purpose - to pay for the services of specialists, complete the development, purchase components and start producing and sending goods to customers. The money for all this needs to be found on your own, off the site, but then what is the point of crowdfunding?

And here's what: the new scheme is beneficial to big business, which has no problems with financing development, but does not need reputational risks. You can create as many supposedly independent startups as you like, present your controversial new products through them, look at the audience's reaction and draw conclusions. In case of failure, simply close the project, and in case of success, officially “buy” your own talented startup. With this approach, the rule of "guaranteed delivery" is only beneficial, but if there is initially nothing besides the revolutionary idea, then how can the project be started at all? Crowdfunding can face major shocks.