Simple Questions to Ask Yourself Before Backing a Crowdfunding Project
Either our decision to write this article or something in the Universe conspired to make it so, but I was notified through Google Alerts of any articles about failed campaigns. The articles like these were nothing really new to myself or the rest of the team here at LaunchMii, but I thought that it was interesting how, within the article itself, there are links to many other failed campaigns. In one, Kickstarter is mentioned to have had a study commissioned to look into how likely a campaign will fail.
Though the numbers are low, one should still be cautious on how and what they put their hard earned money behind. Below is our article on some basic questions you should consider before backing a campaign, especially if you are a first time crowdfunder. This article is also for us "Super Backers" that have been around the block a few times. If you were to ask me, how I know a campaign will succeed, I would be hard pressed to answer. I could say I've been fortunate that I've not picked a "dud", but in the early days, I know I backed a few that didn't reach their target. I've never (knock on wood) had a campaign not deliver though...a lot were late, but that's expected in my books.
To further explain our points below, we will be tackling each point as a separate article and future videos, so you too can be confident in where you put your money.
Enjoy - The Launchmii Team
Through crowdfunding, countless ideas earn their beginning from savvy backers who believe in them. New products, artistic projects, books, and community improvement initiatives, to name a few, have all made their way into the world through this type of funding. As a backer, it's fun to get on a crowdfunding site and see all of the brave, inventive, wacky ideas waiting to come to life. However, there are definitely some things that you may want to think about before taking out that credit card and going all-in with your support.
When you back a crowdfunding project, you are most likely backing it because you believe in the product. Unfortunately, a common roadblock that backers run into is the product not being completed or taking longer than expected to complete. While setbacks are normal in the business world, and every project has their fair share, you want to take precautions to minimize that possibility with projects you are funding.
Questions to consider regarding the product:
Is there a manufacturing plan and timeline? Do they know how much it is going to take to produce each product? How many products are they planning on making?
If there are no answers available for these questions, you may want to reconsider your choice to back the project. A lack of plan at the beginning of the project does not show promising signs for a fruitful ending. Similarly, if others see that there are no plans in place for the product, then you will run a risk of the project not even finding enough backers to get off the ground.
Having confidence in the people behind the project is almost more important than having confidence in the product itself. The people behind the project make things happen and are ultimately going to ensure that the money you have invested is spent wisely and on what you intended it for. Sadly enough, there are funders who see their hard earned money invested in a project and then spent for something else and you don’t want that to happen to you.
Questions to consider regarding the people behind the project:
Have they ever had a previous successful project? What initiative are they taking to find strong backers? Do you personally know them? Are they willing to answer your questions? Are they willing to show you their plans?
While it not required for you to personally know them, it certainly doesn’t hurt. However, the most important thing to look for with the people behind the project is their transparency. You want to work with people who are willing and eager to give you honest answers to questions regarding your money.
The Last Question to Consider Regarding the Crowdfunding Project:
Are there other experienced, knowledgeable backers already invested in the project?
If you are new to navigating the world of crowdfunding following the experienced flock is always a good thing. Get to know who the experienced backers are and look to their investments as a way to guide you. These people know how to find the best combination of risk and ambition to get a great return!