Reply To: Sad news about 4Ground going into Liquidation

[Anonymous 0xp 3]

Crowd funding platforms are an investment market, you provide money to a company who offer some future return as the reward for this investment.   Investing does not have to mean stocks and shares – your return is the product that they send you.  I think crowdfunding platforms are hugely beneficial for our economy and bringing new, risky ideas to the market, and have allowed a number of small businesses to flourish and grow.  Yes, it isn’t perfect, there have been some companies who have been fraudulent in their actions, others who have been run by incompetents but for companies who normally wouldn’t be able to get affordable or unsecured loans from traditional markets, crowdfunding is perhaps the only source of “finance” they can get in order to get their idea or product to market.

I don’t believe we need laws to regulate crowdfunding platforms, people should be intelligent enough to protect themselves in these cases.  We should not allow a few bad apple to spoil the cart and what would be a better solution is for crowdfunding platforms to regulate themselves better.  This has been discussed on Weekenders and XLBS before.  There is no easy solution, I’m certainly not intelligent to come up with one, but one thing I don’t believe they crowd funding platforms do well enough is get companies to explain how the money is going to be used.  Perhaps, get companies to submit actual development and production timelines and to require companies to give regular updates based on these timelines.  The more information people have, the more an informed choice they can make whether they are going to invest or not.