Crowdfunding has (at least) two core problems: failure and trust.
A new startup, led by Randi Zuckerberg (sister of Mark), claims that “85 percent of campaigns end up delaying delivery, while up to 14 percent fail altogether.”
The other problem is that once the money is released, there is no way for investors to track it to determine if it’s being put to good use.
This new blockchain startup, called “Pledgecamp” (no endorsement implied), wants to (and some would cheer) get rid of the lawyers and use smart contracts that would give donors some control over how their money is being spent. This is called “Backer Insurance” and, like all good VC’s do, requires that the entrepreneurs provide development delivery milestones for which funds would be released if the backers vote to do so.
The milestones are set by the donee company, so presumably, they should be hittable (new word).