The soft cap is the capital amount gathered at which the crowdsale event will be considered successful. It is the minimal amount of funds needed and aimed at by the project to proceed as planned. Most of the projects reach their soft caps because an Initial Coin Offering is currently one of the best ways to kick-start a project and to raise capital.
The soft cap is not guaranteed to be reached and it has mainly a speculative nature. If it isn’t reached then most of the projects will shut down and return all the raised capital to the investors. Not all do this and some proceed with the project regardless of the capital raised. The project then enters life support mode. For investors, it is important that the soft and the hard cap are based on numbers and real plans. Transparent projects are the one who builds the most trust with their community.