No More Paypal Payment Protection for Crowdfunding Pledges

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No More Paypal Payment Protection for Crowdfunding Pledges

paypal-320

Paypal will no longer cover crowdfunding pledges under its payment protection plan.

If you've been using Paypal for your pledges on Kickstarter, Fig, or any other crowdfunding platform, there are some changes coming in June that you should know about. As of June 25, the company will no longer cover crowdfunding pledges under their payment protection plan, which allowed users to recover the money pledged if the project did not deliver.

The changes were announced in a post on the Paypal company blog. In a statement, the company said of the changes, "In Australia, Brazil, Canada, Japan, United States and other countries, we have excluded payments made to crowdfunding campaigns from our buyer protection programs. This is consistent with the risks and uncertainties involved in contributing to crowdfunding campaigns, which do not guarantee a return for the investment made in these types of campaigns. We work with our crowdfunding platform partners to encourage fundraisers to communicate the risks involved in investing in their campaign to donors." Note that these changes will not affect users in the UK.

Paypal also said that while a user can still file a dispute to try and recover funds from the seller, "PayPal will generally not find in your favor if you escalate a dispute to a claim for an item which is not eligible for PayPal Purchase Protection"

This change means that there's one less way for burned crowdfunders to recover the money they lost in a failed project. Crowdfunding is inherently risky, which is why Paypal made this move. It only underscores the need for diligence from backers before they part with their money.

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Well, I think Crowdfunding in general needs an overhaul in how they work. I am in favor of it overall, but cancelled/unfinished projects should return the money.

I also think overfunded projects shouldn't be punished for getting a lot of money though either. If you need 100,000 for your game, and get 1 mill, good for you, but worry on delivering that 100,000 worth finished project, then worry about padding it out or improving it. Maybe give backers the game for free, but otherwise, lucky you.

Saelune:
Well, I think Crowdfunding in general needs an overhaul in how they work. I am in favor of it overall, but cancelled/unfinished projects should return the money.

They don't have it anymore. How much blood can you get out of a rock?

lacktheknack:

Saelune:
Well, I think Crowdfunding in general needs an overhaul in how they work. I am in favor of it overall, but cancelled/unfinished projects should return the money.

They don't have it anymore. How much blood can you get out of a rock?

Like I said, a lot of reworking needs to be done. Perhaps money shouldn't be given to them until the goal is reached. Then its the project's responsibility to be finished. If you cant pay it back, then don't just cancel it. If this means they have to pay back backers with their own money, that's on them, now isn't it? I don't think backers are the only ones who should be worried about risks from crowdfunding.

Saelune:

lacktheknack:

Saelune:
Well, I think Crowdfunding in general needs an overhaul in how they work. I am in favor of it overall, but cancelled/unfinished projects should return the money.

They don't have it anymore. How much blood can you get out of a rock?

Like I said, a lot of reworking needs to be done. Perhaps money shouldn't be given to them until the goal is reached. Then its the project's responsibility to be finished. If you cant pay it back, then don't just cancel it. If this means they have to pay back backers with their own money, that's on them, now isn't it? I don't think backers are the only ones who should be worried about risks from crowdfunding.

Projects fail all the time, Investors lose money into the eather all the time. And as the other guy said, Projects fail when the money is gone. You cant refund hundreds of thousands of dollars when your broke, so the only way such a protection could work is if some sort of third party insurance was added, which would make everything way more expensive for all involved.

Saelune:

lacktheknack:

Saelune:
Well, I think Crowdfunding in general needs an overhaul in how they work. I am in favor of it overall, but cancelled/unfinished projects should return the money.

They don't have it anymore. How much blood can you get out of a rock?

Like I said, a lot of reworking needs to be done. Perhaps money shouldn't be given to them until the goal is reached. Then its the project's responsibility to be finished. If you cant pay it back, then don't just cancel it. If this means they have to pay back backers with their own money, that's on them, now isn't it? I don't think backers are the only ones who should be worried about risks from crowdfunding.

But they need the money to continue the proyect. You're making a catch 22

That's quite a tongue twister of a title. PayPal Payment Protection Pledges.

Well, there does need to be an overhaul, though I think it needs to be the backer's expectations that need overhauling.

I mean, scams are one thing, but if a group made a good faith effort and the project just fails? That's life. Complain about it, sure, but expecting to get paid back by the people who needed to crowdfunding in the first place?

There's only so much getting a second job can do, you know? This isn't a loan, it isn't an investment, it's crowdfunding to have something made that you want to exist. The best attitude to have while crowdfunding is to think of it as setting fire to your money in the hopes that your sacrifice pleases the Old Ones and you get something in return. Don't kill the well meaning priest when the sacrifice fails, but be vigilant for the charlatan.

L34dP1LL:

Saelune:

lacktheknack:

They don't have it anymore. How much blood can you get out of a rock?

Like I said, a lot of reworking needs to be done. Perhaps money shouldn't be given to them until the goal is reached. Then its the project's responsibility to be finished. If you cant pay it back, then don't just cancel it. If this means they have to pay back backers with their own money, that's on them, now isn't it? I don't think backers are the only ones who should be worried about risks from crowdfunding.

But they need the money to continue the proyect. You're making a catch 22

Like I said, I don't think they should get the money until they meet their backing goal, so if they mathed it right, shouldn't need more money. I don't think they should get anything until then. If you paid for a service, and they don't do it, you wouldn't want to still pay them, would you?

Saelune:

L34dP1LL:

Saelune:
Like I said, a lot of reworking needs to be done. Perhaps money shouldn't be given to them until the goal is reached. Then its the project's responsibility to be finished. If you cant pay it back, then don't just cancel it. If this means they have to pay back backers with their own money, that's on them, now isn't it? I don't think backers are the only ones who should be worried about risks from crowdfunding.

But they need the money to continue the proyect. You're making a catch 22

Like I said, I don't think they should get the money until they meet their backing goal, so if they mathed it right, shouldn't need more money. I don't think they should get anything until then. If you paid for a service, and they don't do it, you wouldn't want to still pay them, would you?

Yeah, they dont get the money unless the funding goal is met, at least through all the ones I know of. I think the change here is that after the project has taken the money, some still fail to deliver and that is the change that paypal is making, they are specifically saying that money is gone, you cant try and get it back.

Worgen:

Saelune:

L34dP1LL:
But they need the money to continue the proyect. You're making a catch 22

Like I said, I don't think they should get the money until they meet their backing goal, so if they mathed it right, shouldn't need more money. I don't think they should get anything until then. If you paid for a service, and they don't do it, you wouldn't want to still pay them, would you?

Yeah, they dont get the money unless the funding goal is met, at least through all the ones I know of. I think the change here is that after the project has taken the money, some still fail to deliver and that is the change that paypal is making, they are specifically saying that money is gone, you cant try and get it back.

Depending on the project, people should still get something back atleast.

Saelune:

L34dP1LL:

Saelune:
Like I said, a lot of reworking needs to be done. Perhaps money shouldn't be given to them until the goal is reached. Then its the project's responsibility to be finished. If you cant pay it back, then don't just cancel it. If this means they have to pay back backers with their own money, that's on them, now isn't it? I don't think backers are the only ones who should be worried about risks from crowdfunding.

But they need the money to continue the proyect. You're making a catch 22

Like I said, I don't think they should get the money until they meet their backing goal, so if they mathed it right, shouldn't need more money. I don't think they should get anything until then. If you paid for a service, and they don't do it, you wouldn't want to still pay them, would you?

Websites like Kickstarter don't give anything unless the first goal for the project is accomplished. Literally your exact suggestion.

Other than that, you seem to be saying "if a project falls through, the people should be dragged through financial hell".

When you fund a project. You are giving the person charity (in some sense). Its usually not their fault if a project fails.

Kibeth41:

Saelune:

L34dP1LL:
But they need the money to continue the proyect. You're making a catch 22

Like I said, I don't think they should get the money until they meet their backing goal, so if they mathed it right, shouldn't need more money. I don't think they should get anything until then. If you paid for a service, and they don't do it, you wouldn't want to still pay them, would you?

Websites like Kickstarter don't give anything unless the first goal for the project is accomplished. Literally your exact suggestion.

Other than that, you seem to be saying "if a project falls through, the people should be dragged through financial hell".

When you fund a project. You are giving the person charity (in some sense). Its usually not their fault if a project fails.

If you want charity, start one. These people could just invest their own money from the start if they don't want to deal with other people, but they are taking other people's money and that makes it a big deal. A lot of you guys seem to see me as attacking the projects, but I think of it as defending the backers, atleast partially. Maybe you wont get a full refund, and there are tons of variables to take into account with each backer and project, but when you take someone's money and promise something, you need to accept the responsibilities that atleast in my opinion, should come with that.

Saelune:

Worgen:

Saelune:
Like I said, I don't think they should get the money until they meet their backing goal, so if they mathed it right, shouldn't need more money. I don't think they should get anything until then. If you paid for a service, and they don't do it, you wouldn't want to still pay them, would you?

Yeah, they dont get the money unless the funding goal is met, at least through all the ones I know of. I think the change here is that after the project has taken the money, some still fail to deliver and that is the change that paypal is making, they are specifically saying that money is gone, you cant try and get it back.

Depending on the project, people should still get something back atleast.

I agree in principle, but unless the project literally took the money and ran. Its probably all gone. If you put money in the stock market and the value of your stocks tanks, you dont get anything back either.

Worgen:

Saelune:

Worgen:

Yeah, they dont get the money unless the funding goal is met, at least through all the ones I know of. I think the change here is that after the project has taken the money, some still fail to deliver and that is the change that paypal is making, they are specifically saying that money is gone, you cant try and get it back.

Depending on the project, people should still get something back atleast.

I agree in principle, but unless the project literally took the money and ran. Its probably all gone. If you put money in the stock market and the value of your stocks tanks, you dont get anything back either.

Well, why is the money gone? If nothing else some communication would be nice. Explain why you need x amount of money, and if you get that much and its still not enough, why? Why did it fail? Does it have to fail or are you just not trying hard enough? Just being clear can be a big help.

Saelune:

Worgen:

Saelune:
Depending on the project, people should still get something back atleast.

I agree in principle, but unless the project literally took the money and ran. Its probably all gone. If you put money in the stock market and the value of your stocks tanks, you dont get anything back either.

Well, why is the money gone? If nothing else some communication would be nice. Explain why you need x amount of money, and if you get that much and its still not enough, why? Why did it fail? Does it have to fail or are you just not trying hard enough? Just being clear can be a big help.

Because the moneys been spent. Crowdfunding is about funding the development of something, sometimes it will end up in early access or something for sale, but sometimes it will turn out not to be enough and all the money will be gone.

Saelune:

Worgen:

Saelune:
Depending on the project, people should still get something back atleast.

I agree in principle, but unless the project literally took the money and ran. Its probably all gone. If you put money in the stock market and the value of your stocks tanks, you dont get anything back either.

Well, why is the money gone? If nothing else some communication would be nice. Explain why you need x amount of money, and if you get that much and its still not enough, why? Why did it fail? Does it have to fail or are you just not trying hard enough? Just being clear can be a big help.

I think you're vastly overestimating the amount of control most of these developers have; sure most developers should set the goal somewhat over what they really need as an emergency fund, but there are so many outside factors that can destroy even a cautious-within-all-reason budget such as: lawyer costs if the developer gets embroiled in a big lawsuit, something that delays production (office building being destroyed in a fire for example; either you keep paying the team while not working or dismiss them all and have to go through re-hiring, neither of which is inexpensive), a personal crisis of a crucial member of the team that forces them to abandon or delay the project, the reasons go on endlessly. And all of this is further exacerbated by the Kickstarter model forcing the developer to set the goal as low as possible due to it being 'all or nothing' collection model.

As has been pointed out above,
Crowdfunding isn't a store,
Crowdfunding isn't an investment,
Unless there's outright fraud involved the money has been spent; salaries, development tools (both software and hardware), office rent, community managers, all of these are expenses you can't exactly 'take back' when the project crashes. The only sell-able assets are maybe the IP and current state of the project, which likely no one wants to buy.

While there's an argument to be made that Kickstarter/its clients aren't taken to task enough for trying to make their projects seem like a store to bring in money it isn't like that fact is deeply buried or actively hidden. Kickstarter is money shoveled into a fire in the hopes the ashes are something worthwhile.

Worgen:

Saelune:

Worgen:

I agree in principle, but unless the project literally took the money and ran. Its probably all gone. If you put money in the stock market and the value of your stocks tanks, you dont get anything back either.

Well, why is the money gone? If nothing else some communication would be nice. Explain why you need x amount of money, and if you get that much and its still not enough, why? Why did it fail? Does it have to fail or are you just not trying hard enough? Just being clear can be a big help.

Because the moneys been spent. Crowdfunding is about funding the development of something, sometimes it will end up in early access or something for sale, but sometimes it will turn out not to be enough and all the money will be gone.

Was semi-rhetorical. Did they waste money on frivolous things? Did they blow it all on graphic fidelity when they should have spread it out better, did they use the money to pay for expensive lunches and not the project? The backers essentially become their publisher, so I think "its gone" is not a good enough answer.

MoltenSilver:

Saelune:

Worgen:

I agree in principle, but unless the project literally took the money and ran. Its probably all gone. If you put money in the stock market and the value of your stocks tanks, you dont get anything back either.

Well, why is the money gone? If nothing else some communication would be nice. Explain why you need x amount of money, and if you get that much and its still not enough, why? Why did it fail? Does it have to fail or are you just not trying hard enough? Just being clear can be a big help.

I think you're vastly overestimating the amount of control most of these developers have; sure most developers should set the goal somewhat over what they really need as an emergency fund, but there are so many outside factors that can destroy even a cautious-within-all-reason budget such as: lawyer costs if the developer gets embroiled in a big lawsuit, something that delays production (office building being destroyed in a fire for example; either you keep paying the team while not working or dismiss them all and have to go through re-hiring, neither of which is inexpensive), a personal crisis of a crucial member of the team that forces them to abandon or delay the project, the reasons go on endlessly. And all of this is further exacerbated by the Kickstarter model forcing the developer to set the goal as low as possible due to it being 'all or nothing' collection model.

As has been pointed out above,
Crowdfunding isn't a store,
Crowdfunding isn't an investment,
Unless there's outright fraud involved the money has been spent; Salaries, development tools, community managers, all of these are expenses you can't exactly 'take back' when the project crashes.

While there's an argument to be made that Kickstarter/its clients aren't taken to task enough for trying to make their projects seem like a store to bring in money it isn't like that fact is deeply buried or actively hidden. Kickstarter is money shoveled into a fire in the hopes the ashes are something worthwhile.

I don't think a building fire is the main cause of project failure. I understand context. I'm certainly more lenient on projects that fail cause of something truly out of their control like fires, or some disaster. But I'm betting most failures are due to irresponsibility, either due to poor planning, wasteful spending, or general negligence. If nothing else, if they fail and cant prove its not their fault, then they should have to pay the backers back somehow.

Saelune:

MoltenSilver:

Saelune:
Well, why is the money gone? If nothing else some communication would be nice. Explain why you need x amount of money, and if you get that much and its still not enough, why? Why did it fail? Does it have to fail or are you just not trying hard enough? Just being clear can be a big help.

I think you're vastly overestimating the amount of control most of these developers have; sure most developers should set the goal somewhat over what they really need as an emergency fund, but there are so many outside factors that can destroy even a cautious-within-all-reason budget such as: lawyer costs if the developer gets embroiled in a big lawsuit, something that delays production (office building being destroyed in a fire for example; either you keep paying the team while not working or dismiss them all and have to go through re-hiring, neither of which is inexpensive), a personal crisis of a crucial member of the team that forces them to abandon or delay the project, the reasons go on endlessly. And all of this is further exacerbated by the Kickstarter model forcing the developer to set the goal as low as possible due to it being 'all or nothing' collection model.

As has been pointed out above,
Crowdfunding isn't a store,
Crowdfunding isn't an investment,
Unless there's outright fraud involved the money has been spent; Salaries, development tools, community managers, all of these are expenses you can't exactly 'take back' when the project crashes.

While there's an argument to be made that Kickstarter/its clients aren't taken to task enough for trying to make their projects seem like a store to bring in money it isn't like that fact is deeply buried or actively hidden. Kickstarter is money shoveled into a fire in the hopes the ashes are something worthwhile.

I don't think a building fire is the main cause of project failure. I understand context. I'm certainly more lenient on projects that fail cause of something truly out of their control like fires, or some disaster. But I'm betting most failures are due to irresponsibility, either due to poor planning, wasteful spending, or general negligence. If nothing else, if they fail and cant prove its not their fault, then they should have to pay the backers back somehow.

I was using a building fire as the most extreme example, not a general occurrence (thought I would argue legal costs are a very variable amount that most people would be surprised how much even a 'smooth' project endures, much less a troubled one); the truth is it's usually a death of a thousand cuts. You CANNOT plan for many slight road bumps that build up and build up and suck the blood out of a project drop by drop over long periods. As a developer all you can do is cross your fingers and hope you aren't the one who slams into these walls. Yes there's bad planning on a lot of projects but frankly no one is prescient and planning is a hell of a lot easier said than done even by the best. The money required to adequately be a 'just in case' fund against the worst case scenarios would add an astronomical number to most projects and strangle them in the Kickstarter crib.

But ok, let's say there's a hypothetical scenario the glaring incompetence of a project's management is plain for all to see. How/why should they pay the money back? To start with the how, where exactly is the money to pay back going to come from? Do you think any bank is going to give a loan to someone to do so? you'd be laughed out of the building. Sell off your assets? What assets and who would buy them?
As for the why, are you going to insist the developer bankrupt themselves personally? There is no way to coerce that because the exact purpose of a corporation is to allow enterprise without someone having to force their personal finances being dragged into their business failures and I highly doubt anyone would render themselves homeless just to repay out of the goodness of their hearts, especially when their financial future is likely completely shot by their failure.

MoltenSilver:

Saelune:

MoltenSilver:

I think you're vastly overestimating the amount of control most of these developers have; sure most developers should set the goal somewhat over what they really need as an emergency fund, but there are so many outside factors that can destroy even a cautious-within-all-reason budget such as: lawyer costs if the developer gets embroiled in a big lawsuit, something that delays production (office building being destroyed in a fire for example; either you keep paying the team while not working or dismiss them all and have to go through re-hiring, neither of which is inexpensive), a personal crisis of a crucial member of the team that forces them to abandon or delay the project, the reasons go on endlessly. And all of this is further exacerbated by the Kickstarter model forcing the developer to set the goal as low as possible due to it being 'all or nothing' collection model.

As has been pointed out above,
Crowdfunding isn't a store,
Crowdfunding isn't an investment,
Unless there's outright fraud involved the money has been spent; Salaries, development tools, community managers, all of these are expenses you can't exactly 'take back' when the project crashes.

While there's an argument to be made that Kickstarter/its clients aren't taken to task enough for trying to make their projects seem like a store to bring in money it isn't like that fact is deeply buried or actively hidden. Kickstarter is money shoveled into a fire in the hopes the ashes are something worthwhile.

I don't think a building fire is the main cause of project failure. I understand context. I'm certainly more lenient on projects that fail cause of something truly out of their control like fires, or some disaster. But I'm betting most failures are due to irresponsibility, either due to poor planning, wasteful spending, or general negligence. If nothing else, if they fail and cant prove its not their fault, then they should have to pay the backers back somehow.

I was using a building fire as the most extreme example, not a general occurrence (thought I would argue legal costs are a very variable amount that most people would be surprised how much even a 'smooth' project endures, much less a troubled one); the truth is it's usually a death of a thousand cuts. You CANNOT plan for many slight road bumps that build up and build up and suck the blood out of a project drop by drop over long periods. As a developer all you can do is cross your fingers and hope you aren't the one who slams into these walls. Yes there's bad planning on a lot of projects but frankly no one is prescient and planning is a hell of a lot easier said than done even by the best. The money required to adequately be a 'just in case' fund against the worst case scenarios would add an astronomical number to most projects and strangle them in the Kickstarter crib.

But ok, let's say there's a hypothetical scenario the glaring incompetence of a project's management is plain for all to see. How/why should they pay the money back? To start with the how, where exactly is the money to pay back going to come from? Do you think any bank is going to give a loan to someone to do so? you'd be laughed out of the building. Sell off your assets? What assets and who would buy them?
As for the why, are you going to insist the developer bankrupt themselves personally? There is no way to coerce that because the exact purpose of a corporation is to allow enterprise without someone having to force their personal finances being dragged into their business failures and I highly doubt anyone would render themselves homeless just to repay out of the goodness of their hearts.

When you take out a loan and don't pay it back, they take your stuff.

Saelune:

When you take out a loan and don't pay it back, they take your stuff.

Isn't that exactly what I said? The bank won't give the person a loan so someone can pay back their contributors because the bank knows that money is never going to be paid back and there's no asset worth seizing. So I repeat again, where is the money to pay back the contributors going to come from?

If you're trying to compare a Kickstarter to a loan, well this goes right back to what crowdfunding is not. No one frames contributing to a Kickstarter as a loan (misrepresent as a store maybe, but certainly not a loan or investment).

Saelune:

Worgen:

Saelune:
Well, why is the money gone? If nothing else some communication would be nice. Explain why you need x amount of money, and if you get that much and its still not enough, why? Why did it fail? Does it have to fail or are you just not trying hard enough? Just being clear can be a big help.

Because the moneys been spent. Crowdfunding is about funding the development of something, sometimes it will end up in early access or something for sale, but sometimes it will turn out not to be enough and all the money will be gone.

Was semi-rhetorical. Did they waste money on frivolous things? Did they blow it all on graphic fidelity when they should have spread it out better, did they use the money to pay for expensive lunches and not the project? The backers essentially become their publisher, so I think "its gone" is not a good enough answer.

Keep in mind the amount crowdfunding projects are looking for are mostly loosely based, especially with something like a game. Its impossible to say it costs so much to do so and so. Keep in mind you are funding the project as a whole, not an individual part of it. Feature creep is a thing plus it might take much longer to implement something that one of the higher money goals mentioned. I think Mighty number 9 got caught up in trying to implement the multiplayer. Ultimately it doesnt matter what the money was used for, if there is only like one person working on the game then the money goes to their living expenses, it goes to them being able to work on the game and not work another job. The money is gone, its spent, your not buying a product, your finding an idea.

Makes sense, I didn't even know this was a thing. Risk is part of the crowd funding process. Consider carefully before pledging, and never pledge more than you could throw out of a moving car or burn in a fireplace.

Saelune:

lacktheknack:

Saelune:
Well, I think Crowdfunding in general needs an overhaul in how they work. I am in favor of it overall, but cancelled/unfinished projects should return the money.

They don't have it anymore. How much blood can you get out of a rock?

Like I said, a lot of reworking needs to be done. Perhaps money shouldn't be given to them until the goal is reached. Then its the project's responsibility to be finished. If you cant pay it back, then don't just cancel it. If this means they have to pay back backers with their own money, that's on them, now isn't it? I don't think backers are the only ones who should be worried about risks from crowdfunding.

You're trying to eliminate ALL the risk from the backers, though, which stops it from being a modified investment venture and makes it now a pre-order. We already have those.

Also, Kickstarter already doesn't send money until the goal is met. How have you missed that all these years?

It makes sense to me. Crowdfunding has always had an inherent risk to it. I've only been burned a couple times but I never really got upset about it. If I back a kickstarter, I am fully ready for that money to vanish into nothing.

Saelune:
Well, I think Crowdfunding in general needs an overhaul in how they work. I am in favor of it overall, but cancelled/unfinished projects should return the money.

I somewhat disagree there.

If failed projects do return the money then good for them, but the nature of all crowd funding is that it's a calculated risk, if it goes bust, well it sucks but you knew the risks when you signed up.

Ultimately crowdfunding involves backing a project that either can't or won't get commercial backing. It's up to the would be investor to look at the proposed item and decides if they are going to finish or not.

I've yet to be burned on any crowdfunding that I've backed. I just follow the simple rule of only backing projects that have both clearly defined goals and a working prototype. Any Kickstarter for hardware that isn't already at the pre-production stage can be safely ignored, similarly any game must have a playable build, if it's just some talking heads saying how excited they are and some pretty art then avoid it.

Saelune:
If you want charity, start one. These people could just invest their own money from the start if they don't want to deal with other people, but they are taking other people's money and that makes it a big deal. A lot of you guys seem to see me as attacking the projects, but I think of it as defending the backers, atleast partially. Maybe you wont get a full refund, and there are tons of variables to take into account with each backer and project, but when you take someone's money and promise something, you need to accept the responsibilities that atleast in my opinion, should come with that.

You're arguing this topic a lot considering that you've demonstrated little to no knowledge about crowdfunding.

For starters, you don't understand the processes at all, or the amount of control that people actually have.

Second, you repeatedly state that projects shouldn't receive money until reaching their goal. Something that crowdfunding sites have done for god knows how long.

Third, you seem fixated on the idea that after a project has failed due to monetary issues, that the person running the project should be financially destroyed for the sake of the backer's $20. (As if that needs protecting)

If you fund a project. You fund it knowing the risks that it may not actually work. Projects run into problems. Sometimes problems can devastate a project.

If you donate a large sum of money into a project. You are doing it as a donation. Giving $5000 to a project won't get you $5000 worth of rewards back, but you'll likely get some recognition for your generosity.

Stop saying that it needs an overhaul when you have no idea what you're talking about. Just bite the bullet, admit that you were misinformed, stop arguing this lost cause of an argument and just move on. There's no shame in that. We've all made statements like it before.

Kibeth41:

Saelune:
If you want charity, start one. These people could just invest their own money from the start if they don't want to deal with other people, but they are taking other people's money and that makes it a big deal. A lot of you guys seem to see me as attacking the projects, but I think of it as defending the backers, atleast partially. Maybe you wont get a full refund, and there are tons of variables to take into account with each backer and project, but when you take someone's money and promise something, you need to accept the responsibilities that atleast in my opinion, should come with that.

You're arguing this topic a lot considering that you've demonstrated little to no knowledge about crowdfunding.

For starters, you don't understand the processes at all, or the amount of control that people actually have.

Second, you repeatedly state that projects shouldn't receive money until reaching their goal. Something that crowdfunding sites have done for god knows how long.

Third, you seem fixated on the idea that after a project has failed due to monetary issues, that the person running the project should be financially destroyed for the sake of the backer's $20. (As if that needs protecting)

If you fund a project. You fund it knowing the risks that it may not actually work. Projects run into problems. Sometimes problems can devastate a project.

If you donate a large sum of money into a project. You are doing it as a donation. Giving $5000 to a project won't get you $5000 worth of rewards back, but you'll likely get some recognition for your generosity.

Stop saying that it needs an overhaul when you have no idea what you're talking about. Just bite the bullet, admit that you were misinformed, stop arguing this lost cause of an argument and just move on.

Probably cause I don't back stuff, partially cause of reasons I have argued. Second, a common argument against me is that its the backers risk, but why does that not also apply to the risk of essentially begging for a loan from potential fans? Also I kind of had backed out about almost 6 hours ago, since I'm apparently in the minority, though my opinion hasn't changed.

I also wonder who is being defended. Id imagine Kickstarters to mostly be a couple of people in their house, yet a lot of people have talked as if its an established developer, which I would have even less sympathy for than a few hopefully passionate indies.

No one here is arguing that it is a good thing that backers lose their money, or people who throw money in to failed projects 'deserve' to be ripped off. or that developers should not be held accountable for their failures (on the contrary, having a failed project almost certainly dooms any kind of future whether it's convincing kickstarters or traditional publishers; intangible or no that is a heavy yet justified punishment). What is being argued here is the economic reality of a situation. I'm unclear exactly what you want the failed developer to do:
Ask everyone who worked on the project to give their salaries back and get a refund for every tool and supply they bought? (not happening)
Are you expecting them to be shaken down for their house, their car, their possessions in order to raise the money for refunds? (Also not happening; the entire point of incorporation is to separate corporate and private property and prevent that. And I'm fairly-leftist in my economic beliefs but even I see that incorporation is a necessary tool to encourage the creation of new companies)
Are you expecting them to not ask for money until the project is complete? The entire point of kickstarter is these things can't be made without outside help

Where exactly do you think the money to repay the ripped-off consumer can come from?

essentially begging for a loan from potential fans?

It is not a loan, you are explicit told you cannot expect any return on the money you put in, as treating it as either a loan or an investment brings in a legal nightmare. However, the 'begging' part is right, and that's basically the bottom line: it is a creator saying 'I want to make this, but I cannot make this without begging people to put their hope and money towards trying to achieve this'. Emphasis on the word 'try'.

Saelune:
Probably cause I don't back stuff, partially cause of reasons I have argued. Second, a common argument against me is that its the backers risk, but why does that not also apply to the risk of essentially begging for a loan from potential fans? Also I kind of had backed out about almost 6 hours ago, since I'm apparently in the minority, though my opinion hasn't changed.

I also wonder who is being defended. Id imagine Kickstarters to mostly be a couple of people in their house, yet a lot of people have talked as if its an established developer, which I would have even less sympathy for than a few hopefully passionate indies.

You don't need to back stuff to understand the concept.

Person A has a cool idea so they make a prototype

Person B through Z like the prototype and want it to become a product. They fund it, since billionaire entreppeneurs will not.

Person A launches product. All thanks to the help of the other people.

Is this what you're not getting? Good willed people funding projects which make the world a better place in their own small way. People enabling other people to potentially achieve their dream projects.

Because it seems as if you want..

Person A encounters various problems and their project unfortunately dies. The 25 other people demand their $20 each back. Person A is forced to sell their house in order to pay the $500 to all of the backers.

... Seriously, how do you not see that your logic is just... Really weird, and really wrong?

And usually crowdfunding projects are setup by groups of people who start their own studio or company using the money that backers generousy donate to them, so why would people not refer to them as such?

The only difference between a company like Yacht Club Games and a company like Nintendo is that one is bigger.

Kibeth41:

Saelune:
Probably cause I don't back stuff, partially cause of reasons I have argued. Second, a common argument against me is that its the backers risk, but why does that not also apply to the risk of essentially begging for a loan from potential fans? Also I kind of had backed out about almost 6 hours ago, since I'm apparently in the minority, though my opinion hasn't changed.

I also wonder who is being defended. Id imagine Kickstarters to mostly be a couple of people in their house, yet a lot of people have talked as if its an established developer, which I would have even less sympathy for than a few hopefully passionate indies.

You don't need to back stuff to understand the concept.

Person A has a cool idea so they make a prototype

Person B through Z like the prototype and want it to become a product. They fund it, since billionaire entreppeneurs will not.

Person A launches product. All thanks to the help of the other people.

Is this what you're not getting? Good willed people funding projects which make the world a better place in their own small way. People enabling other people to potentially achieve their dream projects.

Because it seems as if you want..

Person A encounters various problems and their project unfortunately dies. The 25 other people demand their $20 each back. Person A is forced to sell their house in order to pay the $500 to all of the backers.

... Seriously, how do you not see that your logic is just... Really weird, and really wrong?

And usually crowdfunding projects are setup by groups of people who start their own studio or company using the money that backers generousy donate to them, so why would people not refer to them as such?

The only difference between a company like Yacht Club Games and a company like Nintendo is that one is bigger.

Well one, people keep giving me vague unnamed problems and I am supposed to feel bad. Lets ignore the ones who are just trying to con people out of money or atleast have no respect for the people putting their money and faith in them. What about the problems people backing such things face? Shouldn't I not feel bad for them too? I keep getting painted as mean spirited, but I am just on the consumer's side in this.

Saelune:
Well one, people keep giving me vague unnamed problems and I am supposed to feel bad. Lets ignore the ones who are just trying to con people out of money or atleast have no respect for the people putting their money and faith in them. What about the problems people backing such things face? Shouldn't I not feel bad for them too? I keep getting painted as mean spirited, but I am just on the consumer's side in this.

No, you're either trolling or haven't thought about the idea at all.

The developers need money to pay for development hardware, for the food, apartments and such of the staff involved, and a billion other things.

When the money's spent the money's spent. There were these things called "publishers" who'd "invest" into projects to cover for these costs for a share of the profit. But they wouldn't invest in any project where they didn't see a sufficient return... so instead those people went on crowdfunding platforms.

You want crowdfunding without the "funding" part. I'm pretty sure that's called "giving a trailer a Facebook like", and thus already exists too.

Saelune:

Kibeth41:

Saelune:
Probably cause I don't back stuff, partially cause of reasons I have argued. Second, a common argument against me is that its the backers risk, but why does that not also apply to the risk of essentially begging for a loan from potential fans? Also I kind of had backed out about almost 6 hours ago, since I'm apparently in the minority, though my opinion hasn't changed.

I also wonder who is being defended. Id imagine Kickstarters to mostly be a couple of people in their house, yet a lot of people have talked as if its an established developer, which I would have even less sympathy for than a few hopefully passionate indies.

You don't need to back stuff to understand the concept.

Person A has a cool idea so they make a prototype

Person B through Z like the prototype and want it to become a product. They fund it, since billionaire entreppeneurs will not.

Person A launches product. All thanks to the help of the other people.

Is this what you're not getting? Good willed people funding projects which make the world a better place in their own small way. People enabling other people to potentially achieve their dream projects.

Because it seems as if you want..

Person A encounters various problems and their project unfortunately dies. The 25 other people demand their $20 each back. Person A is forced to sell their house in order to pay the $500 to all of the backers.

... Seriously, how do you not see that your logic is just... Really weird, and really wrong?

And usually crowdfunding projects are setup by groups of people who start their own studio or company using the money that backers generousy donate to them, so why would people not refer to them as such?

The only difference between a company like Yacht Club Games and a company like Nintendo is that one is bigger.

Well one, people keep giving me vague unnamed problems and I am supposed to feel bad. Lets ignore the ones who are just trying to con people out of money or atleast have no respect for the people putting their money and faith in them. What about the problems people backing such things face? Shouldn't I not feel bad for them too? I keep getting painted as mean spirited, but I am just on the consumer's side in this.

You are not a consumer in crowdfunding. You earlier called it a charity, and on the most basic level yes that is exactly what it is. I'm unclear what has led you to believe that anyone who contributes to crowd funding is promised anything (with the exception of blatant fraud, which the FTC does pursue).

vague unnamed problems

Even a one-man project requires feeding and housing that person, the tools to work on their project, legal fees both to incorporate and to address the possibility of legal trouble, and that's if every other aspect of their life is egregiously neglected to keep the cost of living as low as possible. A landlord/grocery store/lawyer/hardware vendor/software vendor/gas station/whatever is not going to accept 'my project failed and I need to pay back my backers' to get back the money they paid in the duration they worked on this. If anything at all delays the release of this product (Injury or illness, family emergency/funeral expenses, car wrecks, legal troubles) that instantly jumps the financial needs. As soon as this jumps to a team-size the problems grow geometrically as you now have salaries (also spent on that person's rent/food/etc and unrecoverable), the possibility of dissent, someone quitting and needing to be replaced, more tools, the list is endless. This is not 'nebulous', this is what every business faces every day, and assuming that a kickstarter dev will avoid every possible catastrophe during development is basically as divorced from reality as claiming 'winning the lottery' is a viable retirement plan.

All of this goes back to the core question I'm still waiting for you to answer:

As the project cannot possibly reclaim the salaries, trade tools, their office space rent, lawyer fees spent day by day as the project heaved forward, where is this money you expect be refunded going to physically come from?

I feel like this is in response to the wankers who keep subscribing/donating/contributing to patreon/twitch/kickstarter, and then withdrawing their money right after, just to try and reap benefits of the system before having to actually pay.

And that's a fair problem, but the nuance of the problem isn't covered by just plainly going 'welp, fuck you and your money'.

But there definitely has to be some buyer beware notifications.

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