What up when a crowdfunding campaign fails?

Crowdfunding is the practice of funding a project by raising monetary contributions from a large number of people, typically via the internet.

Today everybody is speaking about crowdfunding and how is simple for people that have a good idea being funding and creating a project. Kickstarter is today the most famous global crowdfunding platform focused on creativity. Here the 44% of the projects reach their funding goal and less of 50% of funding projects are really successful so there is a good probability than the money you give to a project will not give you back nothing.

Funds collected by Kickstarter are not “investments”, they are DONATIONS, with no promise of anything in return. In many projects people ask you money to create a movie, a game, an music album declaring to send you a DVD to whatch, to play or to listen it. But they are not forced to do it.

Kickstarter’s stated policy is not to get involved in failed projects. That is, kickstarter positions itself as a third party hosting platform and leaves it up to the project creators and the project backers to determine what to do with the donated funds in the case of a failed project. Even if the project backers will decide to give back the money they will give back just a part because they will not receive all money. A 5% fee will go to Kickstarter and a fees between 3% and 5% will be hold for payment processing. If funding isn’t successful, there are no fees.

Last example of unsuccessful campaign came from “Midora” a kickstarter campaign to realize a 2D game that was funding with 73,000 $ by more than 3,000 people.

Midora’s director declared:

“I will admit that the amount needed to create this game was largely underestimated for the campaign. I knew that the game would need more than $60,000 to be made. However, like many others, I didn’t think for one second we could reach a goal higher than $60,000, especially after two failed campaigns and no prior advertising.”

“If you want to know exactly how much money we need to finish this game, I will tell you: between $120,000 and $150,000”.

The problem behind these kind of situation is that very very often the people that start a campaign do not have idea how much can cost realizing their project and the process to realize it, also in this case where the project was not a new technology but a “simple” 2D game.

There are also other cases where people disappear with money, this is the case of “Mansion lord” that raised 30,000 $ in 2013. They stop sending out updates. Their website expires. And nearly two years later, it’s become clear that they have disappeared with your money.

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