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| Indiegogo takes a closer look at crowdfunding activities |
Indiegogo's crowdfunding platform is changing the way it does business from an open platform where anyone can raise money for nearly any goal to a closed model where each event is manually vetted before it begins.
“We don't always meet the expectations of our backers,” said Will Haynes, vice president of products and customer trust for the platform.
When the company was founded in 2008, there were few restrictions on potential entrepreneurs seeking money from like-minded backers. But Haines said openness is not what the crowdfunding community wants now, more than a decade later.
Fans count on the platform to be a safe and trustworthy place. However, the risk must be worth it and supporters need the tools to make informed decisions.
In addition to reviewing the event before the event begins, the company also plans to work closely with the entrepreneurs behind the event to ensure they have a reliable plan and sufficient knowledge to bring their product or idea to market.
The company said that the new method will be used in some events and will be used more widely in the coming months.
Indiegogo has also set up an internal review panel to monitor and evaluate the most dangerous activity across the platform as determined by the fan community.
The board can take a variety of actions, including preventing event owners from starting new events, sending event owners into groups, and informing law enforcement as needed.
Such actions will only be applied to activities that Indiegogo considers harmful. If the event does not receive a response from the event owner after several attempts to contact or does not comply with its terms of use.
Indiegogo and rival GoFundMe form crowdfunding alliance
Indiegogo's mission was to create a global network where entrepreneurs and enthusiasts could bring their ideas to life.
The biggest advantage of the platform is the crowd, and it is the people who are willing to take certain risks. The company said Indiegogo donations — money made by campaign supporters — rose 5.515% between 2010 and 2020.
As part of its fraud prevention efforts, Indiegogo has partnered with crowdfunding platform GoFundMe to create a new entity that will develop best practices for the crowdfunding industry and eliminate those who defraud supporters of bona fide crowdfunding activities.
The two companies describe the trusted crowdfunding alliance as a way for the platforms to work together. It's about setting clear standards of trust and safety for the entire industry.