Sometimes Kickstarters fail. Sometimes they never get off the ground at all. Sometimes they are wildly successful. Sometimes they are successful then fail, like Yogsventure earlier this year. The backlash from Yogsventure was huge, with a lot of angry backers upset at the loss of the game, as well as the loss of their reward levels, which is what determines many backer levels and how much money an individual wants to donate.
In answer to this and other similar recent events, Kickstarter has updated its Terms of Use to provide future guidelines of what is expected of creators and backers when a project runs in to trouble.
“We’re spelling it out,” Kickstarter wrote in a news post, “For the overwhelming majority of projects, it’s pretty simple: creators finish the work they planned, backers are happy and nobody sweats the details. But there are exceptions. Sometimes problems come up, projects don’t go according to plan, and people wind up in the dark about what’s supposed to happen next.”
According to the new guidelines, “every reasonable effort” must be made “to find another way of bringing the project to the best possible conclusion for backers.” That seems fair, though the question arises what is considered “every reasonable effort.” Thankfully, we are not left to wonder, as Kickstarter outlines this as follows:
“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 that’s communicated to backers;
- they’re able to demonstrate that they’ve used funds appropriately and made every reasonable effort to complete the project as promised;
- they’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 biggest thing that the new ToU addresses is that creators need to keep backers informed. So many times when a Kickstarter goes under after it has been successfully funded, backers are left in the dark as to the reason, and often feel cheated out of their investment. Yogscast co-founder Lewis Brindley did issue an email to their backers explaining the cancellation, but that didn’t help the fact that many felt they were lied to and that their funds were misused. Perhaps if the Yogsventure team had been sending out regular updates as soon as it looked like things were heading downhill, perhaps they could have staved a majority of the backlash.
People want accountability when things go awry, but with projects funded on sites like Kickstarter, it should be noted that backers should probably approach with a certain degree of caution. Kickstarter is more akin to an investment portfolio than a retail store, and risk vs. reward plays a big part in whether or not you’re going to cast your dice on the board. It’s nice to see that Kickstarter is taking these recent flops and doing what it can to outline provisions that both sides should follow in the event of a project’s fold, but if people step back a bit and realize they are more like investors than consumers, then they should also realize that their risk doesn’t always equal reward.
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