

Where $37k in Kickstarter pledges went - franciscoapinto
http://www.kickstarter.com/projects/starcommand/star-command-sci-fi-meets-gamedev-story-for-ios-an/posts/208395

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jbellis
Misleading headline. Here's a better summary:

$36,000 "raised"

$32,000 received after kickstarter fees

$12,000 spent on rewards

$2,000 spent on taxes because we didn't understand how LLCs work

$18,000 left for our company and game development (including $5,000 spent on
incorporation, which seems a bit high for an LLC but not a total waste, and
$3,000 attending PAX, which probably was a waste but you can't blame expensive
lawyers for that)

You could be reasonably accurate and still sensational with a "How we lost 50%
of our kickstarter funds to overhead" headline, but "ended up with $4k" is
ridiculous and not supported by the article.

~~~
franciscoapinto
Like I stated somewhere below, I wasn't aiming for sensationalism. Like I also
stated below, suggest a better title and I'll update the submission.

"How we lost 50% of our kickstarter funds to overhead" is not a better title,
since your definition of "overhead" may not be mine -- it isn't, in this case.

~~~
jbellis
Hiding behind "nobody has suggested a title I like so I'll leave the one
everyone agrees is egregiously misleading" is, bluntly, a dick move.

~~~
franciscoapinto
Nice strawman. There was a single title suggestion -- yours. I explained why I
didn't agree with it. I'm not out to get you, and I don't purposefully choose
"sensationalist" headlines for my submissions. I admit that the "actually" on
the headline was poorly chosen and shouldn't have been there.

FYI: There's apparently a time limit for editing a post. I can no longer
change it.

~~~
teilo
Sorry, but I agree with the GP. When I read your title, I expected you to be
describing how Kickstarter cheated you.

A better title: "Want success using Kickstarter? Start with a business plan."

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ragmondo
I don't understand this at all. If they hadn't figured out exactly how much it
would cost to .. buy ipads, hire lawyers, have art and music created, buy
t-shirts etc etc... they why did they go on kickstarter with that figure in
the first place ? In fact the only unexpected / unknown I can see in the post
was 2k in no-shows. I mean... even the tax element was foreseeable surely ??

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ssharp
Does the ease of asking for money on Kickstarter give too much incentive to
not properly plan?

There isn't due diligence on the part of supporters, so supporters are
ultimately funding based on piece of marketing material and not a cogent
business plan. I couldn't imagine expecting someone to give me $36k for my
business without that person having a somewhat realistic and truthful plan on
how that money will be spent.

I don't follow Kickstarter projects, so I don't know how common situations
like this are, but if I were a supporting Kickstarter projects, I'd be upset
if money I pledged was being spent for things other than what was stated.
Fees, taxes, and deadbeats are acceptable and should be expected by supports.
But investing in lawyers, hardware, etc. isn't nearly as clear. If this wasn't
mentioned in the "ask", I'd assume that this stuff has either already been
taken care of or the people behind the project do not have their act together.

And why would you provide t-shirts are certain levels without getting a
realistic estimate of what those t-shirts cost?

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Centigonal
I feel like the title is a little misleading.

I expected an article about inadequate fulfillment on KickStarter's part, but
it turns out that the 32k loss was more a result of tax laws and the project's
spending decisions than anything else.

~~~
franciscoapinto
Please, suggest a better title and I'll update. It was not my intention to use
a sensationalist title . I, however, think that you may be reading too much
into it.

EDIT: do you mean the title here on HN or the post's actual title, on the
kickstarter website?

~~~
ssharp
For me, the HN headline was misleading. I read it as them raising $36k on
Kickstarter, but only being sent a check for $4k when in actuality, they only
lost a few thousand to fees and non-payments.

~~~
franciscoapinto
What would you title it?

~~~
bradleyland
Please read this all the way through before getting too upset :)

Your HN title uses language that is inconsistent with the tone of the update.

"Kickstarter pitfalls: 36k raised, actually ended up with 4k"

The problematic phrase is "actually ended up with". The use of the word
actually implies that there was some deviation from what one would expect.
Tied in with the use of "Kickstarter pitfalls", we end up with the impression
that Kickstarter produces some outcome that is inconsistent with what we
normally expect when funding a business.

Those of us who have run a company understand that when you receive income,
there are many expenses that come along for the ride. Most of us are left
wondering what amount you _thought_ you'd have after fees and taxes.

Then there's the contrast in dollar amounts: $36k to $4k. The language I
pointed out above appears to direct blame at Kickstarter, but the accounting
provided in the update includes things you should have known and planned for.

From my perspective (as a reader), the opening paragraph of your update
expresses a much different view than the HN title.

> In honor of tax day, we thought we would give some insight to our backers
> (as well as potential kickstarters) to how we spent the funds we were given
> at the end of September. Hopefully it sheds some light on why money
> disappears so quickly for game development.

The last sentence spells out the real value for me. You're sharing insight
about where Kickstarter funds go. The title of your update is much better than
the title you chose for HN.

~~~
franciscoapinto
Thank you for this. I'll retitle the HN submission.

BTW, I'm not affiliated with the kickstarter project in any way.

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ABS
It's clear it's all in good faith but they were at least naive since their
project page clearly states the funds were needed to:

\- Hire extra talent for things like music, sound effects and additional
platform development like Android

\- Promote and market to help sell the game and fund future expansions and
possible sequels

\- Localize the game to other regions like Europe and Asia

nowhere did they write they needed money to set up a company and pay the
related fees and buy iPads. I'd be pretty pissed off had I given them money
for something specific and then discover the money was used for something
else. no?

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franciscoapinto
I could observe a recurring point in kickstarter postmortems here: t-shirts
end up being way more expensive than you think they will be.

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jgeorge
For me, if I got a "reward" for funding a project on Kickstarter and then
found out the project itself was in dire straits because the rewards were
unexpectedly more expensive, I'd be pretty tweaked at you. if I fund a
kickstarter project, it's because I want the PROJECT to succeed. The reward is
the icing on the cake. This goes doubly so in a project where the end result
of the project is something that's available in seemingly limitless quantities
like software. (edit: As opposed to a project for a physical item, where the
"reward" for funding is some flavor of the item being produced.)

Fund the project. Apologize for shirts and posters if they can't happen, and
offer a more reasonable alternative for rewards if you can and when you can.
Most people, I think, would understand that, especially if you deliver on the
project as a whole. But I'd rather have the software and no t-shirt
advertising it than a t-shirt advertising a piece of software I might never
see.

Also, using your kickstarter funds to go to PAX was the biggest waste of all
the project money you got. Yes, I know the visibility you'd get at PAX, but
no, don't do it with your project funding unless somewhere in your project
plan you stated you were going to spend some of those funds going to PAX and
advertising vaporware. Your project funders were funding the project, not the
advertising and the free ride to PAX.

Remember what you were asking for funding for - the game. Not the rewards, not
the business setup costs, not going to PAX, not anything but the software. I'd
even excuse the use for taxes because you didn't understand how LLCs work, but
that'd only be in the realm of making sure your project stayed in good graces
with the IRS so you could... deliver the project.

~~~
franciscoapinto
>Remember what you were asking for funding for - the game.

Actually, from the kickstarter page:

The funds generated from Kickstarter allow us to:

    
    
        Hire extra talent for things like music, sound effects and additional platform development like Android
        Promote and market to help sell the game and fund future expansions and possible sequels
        Localize the game to other regions like Europe and Asia

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plehoux
Is there anyone specialized in kickstarter pledge handling? I could see a
startup offering package of basic rewards production, handling and shipping
(posters, tshirts, mugs, etc) to project owner.

Since it all look really time-consuming for someone not in the business of
producing and shipping things.

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Slimbo
I'd have hoped kickstarter would at least vet the rewards offered for
viability on new projects. Seems not?

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garrett_smith
sounds like someone doesn't have the first clue about running a business, at
least from a financial standpoint.

