Some time ago, I wrote a piece on some of the biggest Kickstarter scams in history. While ICOs get a bad rep, traditional crowdfunding is often just as bad if not worse. Though, there’s an important difference: ICOs are evolving. IEOs are providing a means for which ICOs can be vetted whereas traditional crowdfunding has stagnated with regards to improvement.
While Kickstarter scams have led to incredible losses for backers, the scams of Indiegogo, which is even more lax on project launch terms, easily outshine any crowdfunding platform.
The Biggest Crowdfunding Scams
While Indiegogo is a good opportunity for entrepreneurs aiming to raise capital for genuine products, the website has been home to scam projects that led to users’ losses valued in the millions.
Dragonfly Futurefon
In a recent development, Samsung launched the first foldable phone which can expand into a small tablet. However, an Indiegogo project host apparently had the secret to delivering an industry-leading device years ahead of even tech giants.
Such a listing should have raised flags at Indiegogo’s supervision team. There’s a near-zero chance that an unknown brand can deliver advanced mobile technology years ahead of tech giants; however, even that miniscule of possibility is removed once Dragonfly’s softcap is taken into account. The project’s softcap was slightly above $10,000; the claim to be able to develop such a product with such a small budget seemingly slipped past all cautionary radars.
The expandable phone that Dragonfly’s team promised never came to be. The project raised over $700,000 and the project backers had to consume this loss.
This was Dragonfly's proposal.
Triton
Triton is a project that promised to turn sci-fi into reality: a small gadget that could allow people to breathe underwater. The project claimed to create artificial gill technology. Somehow, this pitch not only received a listing on a fundraising giant, but it also managed to raise nearly a million dollars.
Of course, Triton never delivered its artificial gill technology.
Skarp Laser Razor
This product was mentioned in my last listing which ran over the biggest Kickstarter scams. Given that Indiegogo is more lax than Kickstarter, Skarp’s founders capitalized on the opportunity to list on both platforms.
Skarp promied to create the most advanced razor technology to date by developing a unique laser that can offer a shave without harming the skin. The project raised about half a million dollars on Indiegogo but the promise of the best razor to date never materialized.
This project managed to get listed on both Indiegogo and Kickstarter.
Ritot
There’s a clear pattern of Indiegogo listings of claimed products that can turn sci-fi into reality. Ritot’s founders asserted that they had the technology to create the first-ever projection watch.
While a projector’s technology can certainly be fit into a watch, the challenge is to keep the watch small and aesthetic enough to keep it desirable. Ritot was apparently the product that could solve this dilemma even though its proposed pricing was relatively low. The project raised $1.4 million but the promised product never came to be.
There are many other large-scale scams on Indiegogo, but the ones listed above truly stand out. Most of them promise oddly advanced technologies while providing little to no information of how they intend to achieve the product. Yet, crowdfunding platforms don’t mind listing such pitches.
Crowdfunding needs Vertical Improvement
Blockchain technology has been used to further ease the launch of crowdfunding campaigns via ICOs. However, the transparency and voting rights this technology can provide can enable crowdfunding to become both secure and easy. A project called PledgeCamp has launched a new crowdfunding platform where stakes from project launchers and milestones set by project backers ensure scams are thwarted.
On PledgeCamp, project backers can match a founder’s stake with their first milestone. If a project founder is able to provide proof of basic work, the first milestone, which is equal to the stake, will be released. As additional work is provided, the project backers will vote to release additional funds in proportion to the amount of work that is completed.
While a milestone-based system accompanied with the transparency aspects of blockchain technology can deliver vertical improvement to crowdfunding, the history of crowdfunding has a long list of scams. In a later piece, I’ll cover the massive sums that were scammed on Indiegogo, a crowdfunding platform that has much looser terms compared to Kickstarter.
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Greetings @hatu
The need to keep in possession of the latest technology leads us to make high-risk investments, without measuring the consequences. The feeling of having novel items is exciting, for which we pay high prices and play to win or lose. For their part, entrepreneurs should be more honest in their proposals and comply with what is offered, since these actions of non-compliance can be taken as normal, causing new values of deception to be generated in the communities, a situation that is not correct for any society.Hello friend @hatu, a whole world what we have to learn to be able to move with a bit of tranquility, well apparently it will always be like this. Thanks for sharing.
@hatu, SCAMS are one of the biggest and it will not be wrong if i call Traditional Loop Hole in the Financial Industries which breaks Economic Backbones of Individuals and Companies.
Definitely we need Secure method where more Transperancy is available and where everyone can understand where this particular project is moving and what is promised will be able to fulfill or not.
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I guess scams are also on steemit. Have you hear about the magic dice sudden exit
That's a valid point.
STEEM is often used as a make-shift funding platform too.
Yea you are right also
thanks for information mr hatu
@hatu what do you think about btc price ?
Very useful information for me! Thanks Bro.
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It's just time for change & use the technological tools to drive more transparency in our industry!