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Kickstarter project raised $196K and stopped responding

kickstarter.com

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Re: Kickstarter project raised $196K and stopped responding

#51

Post by didibus »

jdechko wrote: post #20
will_brown wrote: post #5

Notwithstanding all the hype and legitimate positives of crowd sourcing, this is the very real negative side. Kickstarter gives unfettered access to funds, which more often than not is required by a given project, and they indemnify themselves and further remove themselves from the funding transactions (a legal requisite for anyone not wanting to be tied up in litigation for the rest of their known life). Perhaps the…

Maybe even only release 50% of the funds initially and hold the rest in escrow until a given set of circumstances are met. That way the users are exposed to less risk knowing they could get half of their funding back. On the downside, if this keeps happening, users aren't going to back as many projects, and fewer projects will be successfully funded (which may or may not actually be a bad thing).

Starting by only giving them the amount of money they said they needed would be nice. 196 000$ of a 12 000$ goal, that's ridiculous, and very tempting to just disappear away with.

Re: Kickstarter project raised $196K and stopped responding

#52

Post by imroot »

alexchamberlain wrote: post #29

Part of their description was the following... Is the Crypteks USB™ Patented? Definitely! Patents covering the unique locking mechanisms as well as iterations for future implementations of varying possible internal electronics have been filed with the USPTO with international coverage. Crypteks Inc. reserves all rights with respect to the use of Logos & Slogans as well as the design concepts and iterations covered un…

Crypteks, Inc has a few patents (mainly dealing with network security), but nothing patented for the USB key.

http://1.usa.gov/14l68Uj

Re: Kickstarter project raised $196K and stopped responding

#53

Post by fragsworth »

maxerickson wrote: post #10
enemtin wrote: post #4

This seems insane that Kickstarter doesn't have a policy on this. Guess all investments have some level of 'risk' to them.

As far as I can tell, they basically want backers to be comfortable with 100% risk. I think this is a reasonable position.

I think it's reasonable too, but something will inevitably change about this. Government always steps in to protect fools.

Best case, I think, is we'll have some federal law requiring obvious and visible disclaimers on these sites that you might lose your money.

Worst case, they impose some kind of transparency restrictions and rules on the developers.

Re: Kickstarter project raised $196K and stopped responding

#54

Post by wubbfindel »

k-mcgrady wrote: post #49
Caerus wrote: post #40

Earlier quoted context omitted.

Then what's the incentive to participate at all? Would backing a project be equivalent to a 12 month high interest loan? Or, equivalent to an IPO where "backers" get a certain percentage of the company (which I'm sure opens a massive legal mess). I don't think most people have a problem with projects failing. It's when creators take the money and don't appear to even attempt to produce the product that something is w…

>> "Then what's the incentive to participate at all?" Someone believes they can create a product you want. They can only create it if you give them some money to get going. The incentive is a product you want getting built. Do you want this thing enough that you're willing to risk $10 backing it? I think for a lot of people that's enough incentive.

Not even a VC backs a project purely because they believe in it - they look for the potential return.

Re: Kickstarter project raised $196K and stopped responding

#55

Post by BurritoAlPastor »

Udo wrote: post #39
BurritoAlPastor wrote: post #37

Earlier quoted context omitted.

How do you mean, they don't offer that kind of separation? It's very easy to back a project without ordering the product; simply don't select a backer reward level when confirming your pledge.

I think those should probably be two separate steps for most projects. General funding to get the research going, making the prototype etc, then as a second step, allow the ordering of the actual product. There might be projects where this is unfeasible, but in general it would be good to separate the creation of the product and the manufacturing/distribution process. It would be safer for everyone involved, and for…

That only makes sense for tech kickstarters. Most kickstarter projects don't have any R&D to speak of, and anyhow many production delays are the result of the manufacturing logistics that a wildly successful kickstarter results in.

Take a look at the OGRE board game project, for example. The game hasn't changed significantly since it was published I'm the 70s, but the kickstarter was successful enough that the manufacturing became much more complicated than planned.

The great success of Kickstarter is that it's a one-size-fits-all crowdfunding platform. You can only get so much oversight that way.

Re: Kickstarter project raised $196K and stopped responding

#57

Post by nightski »

officemonkey wrote: post #26
minimaxir wrote: post #19

Earlier quoted context omitted.

Since Kickstarter gets a 5% cut, they have no incentive to limit the amount of funding.

They have a huge incentive to keep backers comfortable with using Kickstarter. Too many "scamstarter" projects and it's their brand which takes the hit.

This makes no sense. If you are concerned, don't back a project that is already 100% funded...

Re: Kickstarter project raised $196K and stopped responding

#58

Post by mkhaytman »

srumple wrote: post #46
zokier wrote: post #21

Earlier quoted context omitted.

Are failed startup founders also stealing millions of VC money? KS is a risk-investment, not a preorder webshop.

But startup founders are accountable to the VCs. They have to provide updates and let the VCs know what it is they've been doing with the money. If the KS project fails, it fails. But to not provide some sort of update to backers is a serious problem.

Yes, this was my main point here. It's difficult to get that across without writing an entire article for context, and now that ycombinator mods have edited the title its even less clear.

The founders of this project did little more than sign on once in a while to say "its not ready yet, but should be ready soon". Now they've disappeared and there's no accountability for all that money. As an investor, I would at least like to learn from this experience and see where it went wrong and what could have done better. Instead the only lesson I can take away from this is don't trust strangers on the internet.

Re: Kickstarter project raised $196K and stopped responding

#59

Post by sliverstorm »

officemonkey wrote: post #26
minimaxir wrote: post #19

Earlier quoted context omitted.

Since Kickstarter gets a 5% cut, they have no incentive to limit the amount of funding.

They have a huge incentive to keep backers comfortable with using Kickstarter. Too many "scamstarter" projects and it's their brand which takes the hit.

Yeah, but when the scamstarters are optimizing for short-term returns, who says Kickstart isn't? (Intentionally or not)

Re: Kickstarter project raised $196K and stopped responding

#60

Post by Udo »

BurritoAlPastor wrote: post #55
Udo wrote: post #39

Earlier quoted context omitted.

I think those should probably be two separate steps for most projects. General funding to get the research going, making the prototype etc, then as a second step, allow the ordering of the actual product. There might be projects where this is unfeasible, but in general it would be good to separate the creation of the product and the manufacturing/distribution process. It would be safer for everyone involved, and for…

That only makes sense for tech kickstarters. Most kickstarter projects don't have any R&D to speak of, and anyhow many production delays are the result of the manufacturing logistics that a wildly successful kickstarter results in. Take a look at the OGRE board game project, for example. The game hasn't changed significantly since it was published I'm the 70s, but the kickstarter was successful enough that the manufa…

> Most kickstarter projects don't have any R&D to speak of

That's true, but this project sure did. I'm not suggesting more oversight, I was saying that the crowd's expectations should be better managed, and that maybe there could be two levels of commitment for a lot of projects. A first level where the project owners get money to prove they can pull it off, and a second one where actual things are ordered and delivered - if and where applicable of course.

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