Topic: What is the risk behind crowd funding (Read 213 times)

One of the major practice in the financial sector Crowdfunding this is simply raising some amounts of money from a large number of people, which is typically done via the digital world Internet, it is an alternative source of raising funds for projects. if you have a good advisory team and people that have good experience in both the investment induatry, programming field, business ideas and other fields related to crypto-world. then you don't need to panic

Yes! As you know ,there are no business without risk or risks.There are many advantages to crowdfunding, but there are also potential risks that you should be aware of.
These are some of the risk associated withcrowdfunding,
1.There’s no guarantee you will reach your target.
Much like any other business venture, there is a risk of not succeeding. If you do not reach the fundraising target, money collected during your campaign will have to be returned to investors.

2. Your intellectual property becomes public.
Your ideas are online for lots of people to see and there is a risk of someone duplicating your proposition.

3. Underestimating the costs.
It is common to underestimate just how much time and resources crowdfunding takes. Some forms of crowdfunding may create additional costs. For instance, in case of equity crowdfunding, administrative costs may increase along with each issue of shares. You may not have enough capacity to deal with new investors, to provide ongoing information about the project or to process corporate rights of shareholders.

4. Reputational damage.
The market is now quite competitive and you will likely have experienced investors looking into your offering. Any sloppiness, errors or under-preparation will reflect badly on you and your project or business.

The risks are that you probably will need to actually build a product. /irony

As a recipient of the funds your main risk is not achieving enough funding. Other than that, there are some technological and safety risks that you may have with most funding options anyway.

Crowd funding poses risk to both the contributors and you holding the funds because you could be hacked and lose investors money which leaves you with debt to payback and develop a product, and now with regulations being something related to ICOs there extra expenses to needing a legal team to handle legal compliances and all.

Crowdfunding using online platform is little bit different than usual. It's sometimes hard to reach the target group, everybody doesn't understand everything. Sometimes good ideas may fail without good business knowledge. So, gaining credibility is a big deal in crowdfunding.

I about to build my campaign. The type of the campaign is crowd funding. Please guys help me to understand the risk behind  crowd funding.