The Importance Of Instilling Safeguards In Crowdfunding

Keyboard with Crowd Funding Button.
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Crowdfunding is shaping up to becoming a force to be reckoned with when it comes to financing startups and SMEs especially in the Southeast Asian region. A lot of government initiatives have been ongoing with regards to overseeing crowdfunding platforms specifically equity platforms. As this is ongoing, there are a lot of things people need to consider.

Having to approach a lot of people you do not know to ask for money might be a little nerve wracking because you never know if they would like the idea or the product enough to donate to your future business. You would never know if they will be moved to whip out their cards to make a pledge or just move on to the next.

There are a couple of ways to help increase the chances of getting a project funded and that differs from one person to another, one product or idea to another and especially from one platform to another. But as these questions linger at the back of the minds of people, there is an equally important topic that they need to delve into – security.

It is easy to be scared of technology purely because we do not know how it works behind that friendly-user interface. If you are putting money on a crowdfunding campaign, it is not the same as lining up to a bank teller, giving them your money, counting it in front of you and then making sure that it gets posted onto your account with all the accompanying receipts.

Doing the same on your phone or laptop can be distressing because only a handful of people would know exactly how it is being processed. These programmers would know the exact process but they studied these things for years which is something not everyone can do. All you see are number on the screen saying you have donated. Security is a serious issue and is something that the crowdfunding community takes very seriously.

Securing crowdfunding

One of the biggest advantages of putting safeguards in place for crowdfunding is protecting against fraud specifically for donors or backers who give their money to specific projects. This helps to ensure that they are not only funding legitimate campaigns in need of funding but that their personal information is safe from hackers or from phishing.

It can also help to prevent the instances of money laundering because crooks will leave no stone unturned just to get ahead. It is possible that donors and project initiators are in cahoots to launder dirty money to legitimate business operations. Safeguards and due diligence from all sectors including the government can help prevent these things from happening.

The upside of being vigilant with these threats is that it fosters trust and confidence of the people on crowdfunding especially that it is still in its infancy stages in Southeast Asia. This can go a long way in attracting more talents, ingenious products and ideas and legitimate donors and investors to help out startups. This will also help in sustaining crowdfunding for years to come to be enjoyed and used by future generations.

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This article is written by the Crowdfunders Editorial Team. Crowdfunders.Asia is Asia’s leading portal on crowdfunding, property, start-up and business related news operated by CoAssets.com. CoAssets.com is South East Asia’s first real estate crowdfunding site. If you wish to contribute your story, you may write to [email protected]

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