Can you believe what happened at Kickstarter a couple days ago??!??!
Apparently, the *massively successful* “Kobe Red Beef Jerky” campaign turned out to be nothing more than an elaborate FRAUD!
The project was cancelled with less than an hour to go after having raked in over $120,000 in pledges. Fortunately, since the deception was discovered in time, nobody lost any money, but if it hadn’t been for the eagle eyes and suspicious natures of a few intrepid Internet Detective folks this could have been a MASSIVE blow to the concept of crowdfunding!
Let me pull on your ear for a second… Crowdfunding, just like any other “investment” strategy, carries with it inherent risks. When you are giving someone money based on the expectation of a return you could very well be setting yourself up for disappointment. You must take steps to protect your investment if you wish to minimize your risk.
1) Know the product. Understand it. Try to figure out what will make it work or not work. Why would you want to invest money in a flying car if the inventor cannot even explain to you how the thing is supposed to work?
2) Know the person. Do your homework before you whip out your checkbook. Are you getting all your information from the project creator? What is his history? Is there any evidence that he has the ability to deliver?
3) Know the market. Is this really a product/service that you want to associate yourself with? Will it be as “in-demand” as the creator assumes? What makes him think that his invention of a 5-tined fork is going to make him rich?
4) Know when to walk. Sooner or later there will be something – a rumor, an unfavorable news article… something… which gives you that Spidey-sense tingling in the back of your neck. If you start to have doubts about a product, it’s for a reason. Try to root out the cause of those doubts. If your suspicions start to look more and more correct, then get your money back and head for the door.
5) And finally, do not EVER subscribe to the whole “in for a penny, in for a pound” philosophy of investing. It may have worked for Donald Trump, once, but he had a proven concept and the ability to make it happen. If you’ve invested $100,000 into an idea, and the creator just keeps coming to you with the line “I’m about to make a breakthrough, I just need another $5,000″ or “we’re almost there, just a little more cash is needed” then you need to stop what you are doing and walk. What you are experiencing is one of the many logical fallacies. This particular one is called the “Sunk Cost Fallacy.” For a clear explanation, visit this link.
In the meantime, however, stop by OUR campaign and snag some of OUR excellent, 100% non-scam Sriracha Beef Jerky! It will blow your mind!