Pledgecamp Raises $17 Million: Advised by Ripple, Randi Zuckerberg and Keith Teare
Pledgecamp Raises $17 Million Dollars; It’s Advised by Ripple, Randi Zuckerberg and Keith Teare
Pledgecamp, a crowdfunding platform using blockchain technology was able to raise $17 million dollars in a private funding round. The platform is also receiving advises from Randi Zuckerberg, Founder and CEO of Zuckerberg Media; Matt Curcio, VP Data at Ripple; and Keith Teare FOunding Shareholder at Techcrunch.
The company has been founded by Jae Choi, Eddie Lee and Sam Pullman, all of them Kickstarter crowdfunding veterans. The main intention of this new firm is to change the current crowdfunding model with a backer Insurance escrow model using smart contracts.
Both Choi Lee and Pullman were able to raise over $2.2 million dollars launching crowdfunding campaigns on Kickstarter.
They are now claiming that they have realized how to solve inefficiencies for participants and investors. In general, investors tend to place funds in projects that fail to deliver results. Cumming and Hornuf wrote that 85 percent of Kickstarter projects delay product delivery and 14 percent of these projects does not deliver anything at all.
Additionally, they explain that centralized platforms and the incentives they have do not match with what the market participants are searching for. At the same time, intermediary platforms such as Kickstarter receive a proportion of the fundraising campaign.
Randi Zuckerberg commented about it:
“You can do a lot with crowdfunding to support entrepreneurs, but it’s still a bit of an antiquated model because backers put money into projects and they don’t always know if that project is going to pan out. Especially in this new economy, there’s a lot of trust that goes into interactions with strangers. It’s going to be more and more essential where we develop mechanisms where money is held in escrow or is phased out depending on certain milestones being reached.”
In order to work, Pledgecamp uses blockchain technology allowing incentives to be aligned between companies and investors. In this way, creators are able to make campaign deposits and provide transparency by providing information about the business, the project and owners.
Investors will be assured with Backer Insurance smart contracts. These hold the native tokens in escrow for funded projects. In this way, backers can vote for pre-determined milestones to be approved and receive part of their funds back if the project is not able to deliver them on time.
It is possible for new blockchains to create decentralized marketplaces and create incentives for the community. The company will be using their crowdfunding model with a marketplace for participants that want to contribute skills to startups.
In the future, the next generation of crowdfunding platforms will allow creators and investors to be aligned and build innovative solutions together.