News Indiegogo introduces a Shipping Guarantee, withholding money from firms until shipments are made

[Admin]

Indiegogo introduces a Shipping Guarantee initiative that ensures supporters of eligible campaigns get their order on time or receive a quick refund.

Indiegogo introduces a Shipping Guarantee, withholding money from firms until shipments are made : Read more

 

[TheSecondPower]

Isn't the point of Indiegogo that a startup can use future sales as starting capital? Now Indiegogo will be almost useless unless the company already has capital. Although maybe it could be used to convince investors to invest.

 

[edzieba]

Isn't the point of Indiegogo that a startup can use future sales as starting capital? Now Indiegogo will be almost useless unless the company already has capital. Although maybe it could be used to convince investors to invest.

Yep, Indiegogo have reduced themselves to an unnecessary pre-order middleman. If you take preorders yourself, you receive 100% of the up-front funds, but if you go via Indiegogo you not only have them taking their cut, but you don't even get the funds you need!

 

[nightbird321]

Isn't the point of Indiegogo that a startup can use future sales as starting capital? Now Indiegogo will be almost useless unless the company already has capital. Although maybe it could be used to convince investors to invest.

It means that if a campaign advertises a ship by date, it needs to be realistic. If the product is so far away that the campaign has no idea, they have to present it as such and ask for money for R&D (maybe applying funds to the final product when it is out). It's also fine to over-estimate and deliver early.

It only prevents people from throwing out a random date to get funds and with a high miss rate = high scam rate = reduces investing.

 

[nightbird321]

Yep, Indiegogo have reduced themselves to an unnecessary pre-order middleman. If you take preorders yourself, you receive 100% of the up-front funds, but if you go via Indiegogo you not only have them taking their cut, but you don't even get the funds you need!

If you are that confident in your product, pre-orders is what you should do. Crowdfunding sites allow you to gauge interest in your product before you put too much into it, and also you can have milestones other than promising product delivery and ask people to help fund.

 

[TheSecondPower]

It means that if a campaign advertises a ship by date, it needs to be realistic. If the product is so far away that the campaign has no idea, they have to present it as such and ask for money for R&D (maybe applying funds to the final product when it is out). It's also fine to over-estimate and deliver early.

It only prevents people from throwing out a random date to get funds and with a high miss rate = high scam rate = reduces investing.

That makes sense to me.

 

[Oleksa]

I think it's right. Fundraising can show you how engaged your audience is and how much money you can expect to raise. And if you don't have your own funds for investment, you can go take a loan from a bank and take responsibility for it. And when you deliver the products, you can cover the debt with the funds raised.
I don't see any deterrence or worsening of the situation for small companies.
It's just about preventing fraud.
Although it would be possible to make charges without delaying funds, it is necessary to clearly indicate this and warn users about the risks.