A preliminary analysis made by LifeKeeper reveals abuses that can put at risk the continuity of the Crowdfunding industry. A forum has been created to share experiences and proposals.
Valencia, Spain -- (SBWIRE) -- 06/03/2014 -- Joaquin Vila-Belda, PhD, and CEO of LifeKeeper talks about the company's experience in crowdfunding and presents a preliminary analysis explaining the initiative to promote a forum called “Crowdfunding: Improving fair play.”
A few days ago, LifeKeeper launched a crowdfunding campaign on a well-known platform. The goal was to find backers for the first personal mobile device that can help prevent myocardial infarction and stroke.
However, after the first days of the campaign, the results were poor. For LifeKeeper, it was surprising to see such lack of response to a campaign with such an important goal – “combating the most common cause of death in the world” – even though it offers discounts of up to 40% to its backers. The crowdfunding campaign can be found at http://bit.ly/1mu4N68.
Consulted experts have expressed that the team behind the project clearly has a very strong professional background, and the purpose and motivation of the project are clear and easy to understand.
Before concluding on this issue, an analysis of what successful campaigns were doing was carried out.
First, a sample of campaigns with different subjects was selected, including some on technology applied to healthcare.
After the aforementioned analysis, an apparent common factor for obtaining success is the originators' ability to manipulate results by providing funds at key moments. This created a feeling of success, and, more importantly, raised them in the rankings used by the crowdfunding platform, such that their campaigns appear in the best positions and in publicity campaigns of the platform itself.
A specific case was followed in which a campaign had collected more than a million dollars, even though in the platform’s forum and in the press it was argued that the proposed device is not really useful for measuring calorie intake as promised (*).
But how is this possible?
In the cases studied, the procedure used is as follows:
- The funding goal for the campaign is set low, for example, $50,000.
- On the first day of the campaign, friends, acquaintances, and so on make contributions. Also, the originator of the campaign provides his or her own funds via anonymous or virtual user accounts, such as, $30,000; bringing the total to more than the campaign goal.
- This gives it an excellent ranking on the platform, placing the campaign on the website homepage.
- The media reports this extraordinary (but manipulated) early success.
- This has a knock-on effect: people are attracted to success, and the contributions of real backers multiply.
- Having passed the campaign goal, the platform begins to pay out the money.
- These real earnings are used to keep the campaign popular with more fictitious contributions.
In the cases that were analyzed, the amount of money used for manipulation was as much as 10% to 30% of the funds apparently raised. In the case of the device for measuring calorie intake, an initial support of $30,000 led to contributions which appear to top a million dollars. It is hard to know what the real investment by backers was, but in the mentioned case, signs of manipulation appear until the last three days of the campaign.
Consequently, LifeKeeper decided to promote a LinkedIn forum called “Crowdfunding: Improving fair play”, with the goal of finding answers to the following questions: Is it possible that backers are being so badly cheated? Is this abuse frequent or infrequent? How can this be avoided?
The forum is open to anyone interested, and can be found here: http://linkd.in/1pxjla5
General Inquiries: Marc Martin info(at)lifekeeper(dot)pro