| Full disclosure up front: I work for IndieGoGo. I can't speak for other crowdfunding platforms, but I assume that they're similar on this topic. A lot of people bring up the possibility of fraud with these crowdfunding sites (IndieGoGo, Kickstarter, Rockethub, etc.). While fraud is definitely a concern with crowdfunding, it turns out to be a much smaller problem than you would think. First of all, the very nature of crowdfunding seems to act as a natural brake on fraudulent behavior. While it's easy to fool one person, most campaigns have dozens or hundreds of contributors. It's trivially easy for any of those contributors to sound the alarm (to the crowdfunding platform and other contributors) if there's anything fishy. To reinforce this point, it's also been shown that "outside contributions" (contributions from people not personally connected to the campaign or campaign owner) generally don't happen until a campaign's received around 30% of their target amount. Social proof is really important, and it's hard to get if you're a scammer. Secondly, we (IndieGoGo) take fraud very seriously and invest a lot of resources into preventing it. We've got several layers of automated fraud detection, as well as a couple sets of human eyes on every campaign. While we can't guarantee fraud won't happen, we make every effort to make it vanishingly small. In a nutshell, we're working pretty damn hard to make crowdfunding a safe and trustworthy marketplace. So far, the results seem pretty positive. As for the specifics of this legislation: No comment, other than "We're looking at it." |