Crowdfunding site Indiegogo plans to roll out a new option for some campaigns next year that means if you back a project that fails to ship a product, you’ll get a refund for any money you paid.
It’s called “guaranteed shipping,” and it’s not something you’ll see for every campaign. After all, the whole point of crowdfunding is that developers of new products need money to complete the research, development, and/or manufacturing. Withholding payment until an item is ready to ship just isn’t an option for scrappy startups.
But there are also some well-established, well-funded companies that use crowdfunding as a form of marketing to generate buzz or to gauge interest in a new idea. Those are the companies that may be in a position to promise not to charge backers any money until an item is ready to ship… which could make potential backers a little less wary of backing a campaign.
Right now Indiegogo offers two funding options: fixed and flexible.
In a Fixed Funding campaign, the creator sets a goal and if backers don’t pledge enough money to meet that goal by the deadline, Indiegogo will issue refunds to anyone who did back the campaign. The developer doesn’t get the money and either tries again with another campaign or scraps the idea altogether.
Flexible funding means that the creator gets the money whether the goal is reached or not… and whether or not it’s truly enough money to deliver on the promises made in the campaign. Pledging to this sort of campaign is a bit of a riskier prospect — there may be a lower chance of getting the reward promised by the campaign, but at least you’re supporting someone trying to bring something cool into the world… I guess.
Indiegogo also has “Marketplace” storefront that’s separate from the company’s crowdfunding service. People or companies can use the Marketplace to sell existing products, and Indiegogo already offers Guaranteed Shipping for Marketplace purchases.
What’s new is that the company will offer the option to creators of crowdfunding campaigns “early next year,” according to The Verge.