Backing a crowdfunded project is a risk because more often than not, you are backing a project whose project might not even have materialized yet. While there have been quite a few crowdfunding successes, like the Pebble smartwatch, there are some that have been failures despite the initial promise shown.

However the good news is that crowdfunding platforms like Indiegogo want to do something about it and have since updated their policies to help making using its platform safer and more reassuring. According to the company, “We now require Tech and Innovation entrepreneurs to select which Product Stage they are in, from Concept to Shipping. We’ve also clarified exactly what each stage means and the risks associated, especially for concept-stage campaigns.”

This means that not only will backers know exactly what they are backing, but the amount of risk involved in backing it. This will let them make more informed decisions on whether or not they want to proceed or maybe look somewhere else. Indiegogo is also making it mandatory for entrepreneurs to provide monthly updates to their backers about the status of the project, so that they know what’s going on with the money.

Will this help make backing campaigns safer? We suppose to a certain extent backers will now have more information at the disposal, but since anything can happen, it’s hard to say whether a project can be seen through to completion, but we guess every little bit helps.

Filed in General. Read more about Crowdfunding and Indiegogo.

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