The UK Crowd Funding Association (UKCFA) has just launched as a new trade body for crowd funding operators, with membership being conditional to agreeing to the code of practice. Says Arts Professional reporting on the establishment of the body:
The code is aimed at protecting the growing number of investors, donors and businesses using the technology and to ensure that all services are operating to a minimum standard. It states that crowdfunding sites must segregate donors’ money and money for the operator, offer a cooling off period after making an investment, and publish information on customer complaints on the UKCFA website. The UKCFA will comprise the country’s twelve leading crowdfunding businesses and will work to promote this as a method of fundraising, as well as working with policymakers to help develop appropriate policy frameworks.
This sounds like excellent news to enhance consumer confidence in crowdfunding, and their technologies and economic processes. Despite the risks of using the technologies diminishing, Creative Choices also just published an article on the Dark Side of Crowdfunding: it considers what risks are there and what you can do to mitigate the potential of:
- your IP or business model being stolen,
- your traditional investors being turned off,
- tax and accounting issues,
- being sued for misrepresentation, or
- even just the project failing!
A great read.