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Kickstarter Lays Down New Rules For When a Project Fails
An anonymous reader writes "In a blog post, Kickstarter announced several updates to its terms of use for projects. From the article: "Kickstarter has iterated on its policies several times since it launched in 2009, with the most recent wave of revisions surrounding the site's transition from only posting projects cleared by the staff to clearing all projects that meet a basic set of criteria. Even still, some projects lack clear goals, encounter setbacks, or fail to deliver, like the myIDkey project that has burned through $3.5 million without yet to distributing a finished product. The most recent terms revision is timely: on Thursday, science fiction author Neal Stephenson announced that a game he Kickstarted in 2012 with $526,000 in funding was officially canceled."
More transparency will be a good policy for Kickstarter. It's developing what is essentially a new stock exchange, and in the process is finding out what kind of reporting investors will truly find useful.
What kickstarter is afraid of, is something that can't be prevented: namely that people will need more money than they think to make something(or worse, that they happen to be scammers). Once the money is gone, no form of contract is going to get it back. And any scammer with their salt will run the money through a limited liability corporation, and pay themselves divdends/salary out of kickstarter funds. Then it can just go bankrupt.
There won't be anything to reclaim legally. So if you're going to back a kickstarter project, you have to do it in a risk-accepting mindset. Which for me, it means I only back projects that create things that I absolutely know wouldn't end up getting made otherwise. For you, that might just mean "no kickstarter ever"
It's not in the linked article, but here is the interesting part of the new rules: creators have to refund remaining money, and have to post status updates.
Read it here:
If a creator is unable to complete their project and fulfill rewards, theyâ(TM)ve failed to live up to the basic obligations of this agreement. To right this, they must make every reasonable effort to find another way of bringing the project to the best possible conclusion for backers. A creator in this position has only remedied the situation and met their obligations to backers if:
they post an update that explains what work has been done, how funds were used, and what prevents them from finishing the project as planned;
they work diligently and in good faith to bring the project to the best possible conclusion in a timeframe thatâ(TM)s communicated to backers;
theyâ(TM)re able to demonstrate that theyâ(TM)ve used funds appropriately and made every reasonable effort to complete the project as promised;
theyâ(TM)ve been honest, and have made no material misrepresentations in their communication to backers; and
they offer to return any remaining funds to backers who have not received their reward (in proportion to the amounts pledged), or else explain how those funds will be used to complete the project in some alternate form.
The T&C still gives creators a way to hold onto the money. Kickstarter has just shuffled some words around to make it appear as though they have some kind of control. Kickstarter is weird. People throw money at an unproven idea with literally zero chance of financial reward.
I think the whole concept is plain bullshit.
You're risking your money. Period.
There should be no guarantee that, if the project fails, your money will be returned. What the hell? That's not how real life works. Ask any of the dot-com investors if they got any of their money back.
How is this any different from eBay where you could order an iPhone 6 PLUS, and get a brick in a box instead. And there's nothing you can do about it.
Well, everyone who puts money on some stranger's project knows they're running a risk with it, but they expect it to deliver at some point. Just make sure you're not kickstarting with the money to pay the kid's college and you'll be alright.
Romans: I think we should stop using dirt roads and instead dig a few inches and lay flat rocks in the trench to make our roads.
People of that era: Do you have any idea how much work that would involve? How many flat rocks would be required? Are you nuts?
Early 20th century: I think we should stop using roads made from flat rocks and use asphaltum to make our roads.
People of that era: Do you have any idea how much work that would involve? And to remove the rock roads? How much asphaltum would be required? Are you nuts?
Early 21th century: I think we should replace our asphalt roads with solar roadways.
People of that era: Do you have any idea how costly that would be? This will never work! Are you nuts?
Get free satoshi (Bitcoin) and Dogecoins
Financial reward isn't the goal of kickstarter backers. Never has been.
Is it just my observation, or are there way too many stupid people in the world?
I love how the default attitude is spite. Blame America for doing something wrong, instead of the obvious choice - make your own version of kickstarter. With blackjack, and hookers. Then you don't have to listen to what the Americans say at all. Better yet, you can exclude Americans from participating. You can even go so far as to redirect any American IP address to a landing page where you let them know all the problems you have with the US federal government.
Kickstarter doesn't do deals outside the USA for well-known legal reasons. Maybe you can discover what these are when you start your own - but you won't, so the question is moot. Still, I wish someone would. I just don't see it happening, though.
Shutting down free speech with violence isn't fighting fascism. It IS fascism!
People should identify Kickstarter projects out of interest, enjoyment, or just a sense of fun, and contribute no more money than they would be willing to use as kindling to start a campfire. If you contribute $25 in hopes of seeing an indie film completed - great if it does, sad if it doesn't. If you contribute $100 hoping to get a new piece of hardware, don't expect anything other than some p% chance that you will ever receive that hardware or if you do it will work as dreamed. If you don't have the money to lose, don't contribute.
One innovative and clearly risky hardware project I backed has people complaining that the base product shipped 2 months later than planned (hoped) and the premium product will be 5 months late. Um, guys: it was risky. There were commercial alternatives available at 10x the price. You knew that this was an attempt to create a mini-breakthrough, but you're griping because it was 2 months late and the associated app will need some point revisions? Get real.
sPh
They should improve their screening process.
Also, it's important to consider that funding a kickstarter project, is kind of like investing money in the lottery or purchasing one of those scratch lottery tickets. You may or may not win, the likelihood of actually winning is bigger than the lottery, but in reality very small, it's like going to the casino and betting it all on one of 3 rows.
Kickstarter is a gold-mine right now for scammers as well. All you need, is a well thought out plan to CONvince a lot of people out there, and since most people aren't very technical...this isn't hard at all (thus, why we need a better screening process). Many of the funded projects gets WAY more than they asked for, and then GREED grabs them...they lack no skills when it comes to find a reason to use the extra money, and have you noticed how certain products doesn't get cheaper for the public even thought they receive MASSIVE support?
Money baby! It's the shit.
What this world is coming to - is for you and me to decide.
But other than that, what have the Romans done for us?
Dark Reflection
I have an investment that failed a few years ago due to probable corrupt practices (for example: an officer in one company was reporting to an officer in another company - but they happened to be the same person, so all sorts of dastardly things happened.).
At the moment the investment is being wound up and all sorts of legal activities are being pursued in order to realize as many assets as possible that actually exist. The people performing the liquidation keep telling me that I will get back between 10 and 50 cents in the dollar of my investment, depending on what legal actions come to fruition and what the value of the reclaimed assets turn out to be, minus of course all the legal costs.
To me this is the only possible way you can get money back from a failure like this, and I can't see how a failed kickstarted project should be any different - if the project fails, then call the owners of the project on it, and take legal means to reclaim as much as possible with the expectation that you will never get 100% back.
I am Slashdot. Are you Slashdot as well?
But there's a real risk that kickstarter could end up being ruined by scammers, fakes, and overcommerialization.
In other words, venture capitalism.
The reason I back stuff on KS is because I want to fund the little guys. Indies, small teams making stuff that big studios won't because it's "too niche", or "can't be sufficiently monitized".
You are half way to being scammed. Little guys, indies, whatever they use to help sell you on their trustworthyness, That's part of what they are trying to sell you. Its a noble sentiment. But in investment, nobility has no place. They are there to make money, and that's it.
I don't know how to keep the good bits of KS without the assholes ruining it, which seems to be the problem with a lot of things.
You can't. People run the whole range from saints to assholes, and in the world of money, the assholes are pretty much ruling. If a person is concerned about things like ethics, or not doing harm, they won't make as much money compared to a person who is willing to do whatever it takes to increase their wealth.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
Given us a method for numbering Super Bowls.
You could even use Kickstarter to finance the building of Kickstarter's replacement, were you so inclined.
You're special forces then? That's great! I just love your olympics!
A good road should last for tens of centuries. The Romans understood that, and engineered their roads accordingly. To blithely dismiss their roadbuilding expertise as consisting of "flat rocks" ignores the engineering underneath the road, described here. Or if you have kids, David Macauley's City may still hold up after nearly forty years.
American roads rarely last more than a few decades, unless consistently and constantly maintained. But they are comparatively cheap. I hear that European approaches tend to produce a more durable road, at greater expense.
That said, the solar roadway may not turn out to be a very good road by this metric, despite the added construction expense.
Mid 20th century: I think we should build flying cars and make the skies our roadways!
People of that era: That's dangerous and impractical.
Just because an idea is radical and the mainstream rejects it that doesn't make it a *good* idea. Lot's of really bad ideas have been poo-pooed by the mainstream too.
SJW's don't eliminate discrimination. They just expropriate it for themselves.
I would go even farther than that. I think the money should be held in escrow by Kickstarter until the project actually DELIVERS. The business in question could still borrow from a third-party bank against that money, but it would also give Kickstarter the ability to refund it all if the project failed to actually deliver on its promises (instead of counting on the business to refund it).
SJW's don't eliminate discrimination. They just expropriate it for themselves.
I would go even farther than that. I think the money should be held in escrow by Kickstarter until the project actually DELIVERS. The business in question could still borrow from a third-party bank against that money, but it would also give Kickstarter the ability to refund it all if the project failed to actually deliver on its promises (instead of counting on the business to refund it).
If you're going to refund the escrow in the event of project failure, you can't expect a bank to accept those same funds as collateral.
But then in the next paragraph, they say "here are the terms of the contract between the creator and the backer". I suspect this would be very problematic to enforce. You can't be both arms length, and dictating terms to two parties of a contract without also being a party. It is a logical contradiction.
Every lawyer does this every day when he or she is writing up a contract signed by other parties. The lawyer isn't involved unless one of the parties can prove that the lawyer performed malpractice in writing the contract.
All Kickstarter is offering is a standard contract and terms that both parties can agree to or not agree to. The standardize nature of the contract mean's it's easier to raise money and see who's raising money, so it's more likely everyone uses the standard contract. It's the parties involved choice on whether or not they sign sign the terms.
No bank would loan against money that would be returned to the backers, not the bank, were the project to fail.
It doesn't hurt to be nice.
Hello, I have a project here in Nigeria and am asking for your help ...
Don't fight for your country, if your country does not fight for you.
I can't provide links or sources, But I remember reading quite a while ago that Germany places contracts for road-building that includes maintenance for 20 - 40 years. As a result, German/European roads are built to be durable and to require as little maintenance as possible.
In the US, we build cheap sh#t knowing that the taxpayers will be on the hook for the maintenance.
When you are dancing with wolves, never limp
in those three states. I thought they existed everywhere with all sorts of environmental conditions.