Crowdfunding has been a popular form of fundraising for various startups in today’s world. Putting up their details on Kickstarter is now one of the steps for startups to raise money for their projects.
Although crowdfunding is a wonderful way to gain funds, there have been many cases of frauds and mismanagement which have led to people keeping the money for themselves. This has led to a vast distrust among investors and a search for a more reliable and trustworthy system.
Pledgecamp is a next-generation crowdfunding platform built on Blockchain technology that promises to solve issues of trust and crowdfunding mismanagement. The Founder and President, Eddie Lee titles this form of funding as Crowdfunding 2.0.
Lee states that the company is using Blockchain for two basic reasons:
- Blockchain allows for transparency thereby allowing the investors to be fully aware of where their money is exactly being used
- Blockchain also facilitates smart contracts that allow two people on the internet to know their agreement terms and not depend on a third party.
Pledgecamp advisor, Randi Zuckerberg explains how the system works. When the investors provide the money, it gets stored in a form of escrow, and this money is not released until the creator has some progress with the project.
The irony lies in how the company is using Kickstarter to raise funds for a project that could ideally lead to the end of Kickstarter and other crowdfunding platforms.
Lending money to startups has always been a risk, where even Lee mentions that around 85% of campaigns will delay or not deliver anything at all. By using Blockchain smart contracts, the sister of the Facebook founder assures that the money does not get released until necessary thus creating trust and a sense of protection between the creator and the backer.
The project has been announced to be up and running in the Summer of 2019. The team has partnered up with the design agency that worked with Slack and Coinbase.
The Whitepaper is live and is available on the website pledgecamp.com
The interview between Randi and Eddie with Fox Business can be viewed below:
Do you have any ideas which could also use the Blockchain technology? Share it with us in the comments section below.