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> You are entering a legally binding contract with the seller. They must oblige or else refund you.

Where does it say that?

> Think of it like preordering from a local store.

No, again: Kickstarter is not a store. How is it even possible to have this level of misunderstanding when it says exactly that on the linked page.

https://help.kickstarter.com/hc/en-us/articles/115005028834-...

"At the same time, backers must understand that Kickstarter is not a store. When you back a project on Kickstarter, you’re helping create something new — not pre-ordering something that already exists. As Kickstarter does not offer refunds, we encourage backers to investigate the project idea first, to vet the creator thoroughly, and to assess the inherent risk of the project for themselves before making a pledge.

There’s always a chance something could happen that prevents the creator from being able to finish the project as promised. "

And that's from the current terms of service, the previous ones (which were in effect when this project launched) were even more lenient. And that's also why it is called a 'pledge' and not a 'sale'.

I mean, they can say whatever they want on the site, but the real question is: what does the legislation, regulation, and common law say about this?

Has anyone successfully sued a project? Is there case law?

Regret isn't a reason for a restatement of the terms of agreement. If you think that you are going to need a lawyer or sue someone because you backed a Kickstarter short of being fraudulent I suggest you don't ever use Kickstarter at all. That's so against the spirit of what the whole thing is about.

Most Kickstarter backers out in $50 or less.

The filing fee for small claims court is usually $20 and that assumes you live near each other.

They are usually judgement proof but that isn't uncommon in other fields too.

The thing that allows Kickstarter to work in the first place is that it uses low risk on the one side (the backers) to enable the initiators to engage in much higher risk ventures than they would ever be able to do on their own.

If the backers 'back out' because they see that risk as too high retrospectively they should not have engaged in the first place. Because you are out only $50 or less. But collectively you've enabled someone to take on a risk that they could not have carried by themselves, as a backer you underwrite that risk. This is such a fundamental component of crowdsourcing that I find it bizarre that it needs to be spelled out like this. Legal recourse should be reserved for outright fraud, no less.

Yes, that is the theory behind crowdsourcing, but what is the actual legal reality? We often don't know that until it has been tested in a court.

You normally speaking shouldn't care. But there have actually been Kickstarter cases brought to court that were resolved in the favor of the backers.

Examples:

https://arstechnica.com/tech-policy/2015/06/feds-take-first-... (most likely fraud)

https://icv2.com/articles/news/view/32334/court-orders-fines... (seems to have been either bad timing or someone that needed the court to get off their ass)

https://massivelyop.com/2022/10/12/chronicles-of-elyria-dev-... (many millions of $, case dismissed)

So it's a bit of a toss-up. Especially the second is weird because the state is awarded $54K versus a pittance to the backers and apparently the backers did in fact receive their stuff.

All in all, other than outright fraud I don't see much in terms of real world recourse here, and even then you have to wonder if you shouldn't just write it off. The last one is interesting: by handing a lot of $ to a project initiator you are also effectively funding them from defending from you suing them...

> Where does it say that?

Well, the Terms of Use[1] in force at the time make it pretty clear:

> By creating a fundraising campaign on Kickstarter, you as the Project Creator are offering the public the opportunity to enter into a contract with you.

And later on, it suggests backers should expect rewards promised or their money back:

> Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill.

Obviously you and I know better than to expect these to happen, but lets not pretend like everyone participating should have known they were bearing equity-like risk.

[1]: https://www.kickstarter.com/terms-of-use/oct2012

Sure, but the same contract offers arbitrary delivery dates:

> The Estimated Delivery Date listed on each reward is not a promise to fulfill by that date, but is merely an estimate of when the Project Creator hopes to fulfill by. Project Creators agree to make a good faith attempt to fulfill each reward by its Estimated Delivery Date

The point of this site is to gather enough money to make a good faith attempt at something. That's pretty obvious. Even an LLM can figure that out.

Honestly to my understanding that is very common terms in contract law.

Normally you have a right to a full refund if a date is specified and missed (specifically you can liquidate the contract for failure to fulfill which allows you to retrieve your consideration). But pretty much everybody ensures the contract avoids that by either specifying damages for a missed date (which avoids full liquidation) or specifies that no real date is for open ended projects.

Note that with no end date you can still sue for failure to uphold if say updates stop.

Yes, you can sue. But that will likely put the initiator in the poor house, whether you win or lose doesn't even matter. Is that what you had in mind as one of the possible outcomes when backed a project? If so: then don't back that project.

People do Kickstarters without vetting as to their business acumen, skills, planning capabilities, ability to source components, product safety knowledge and so on. This dramatically changes the situation from ordering a good from a store or company and you should adjust your expectation as to delivery, quality of workmanship, product safety and guarantees accordingly.

It is precisely why I've never done a Kickstarter even if there have been multiple occasions where people indicated they would love it if I did that. But I could see the potential trouble down the line with some clarity: I could easily put in a ton of effort, ultimately fail through some unknown factor and still be morally (and in some jurisdictions even legally) on the hook for either the delivery or a refund. This has such a chilling effect that it never even was a consideration to try. And that's precisely what Kickstarter is: to give people a chance to try to achieve their goal. Best effort, at best, and success as a lucky nice-to-have.

And that's why I'm more than happy to back some projects that have low chance of success but where I hope that the initiator will either learn something or in an odd case that it will result in something tangible. I'm pleasantly surprised when it works and I don't sweat it when it doesn't. And I think that's the best match attitude wise for what Kickstarter offers, higher expectations than that and you will be disappointed.

Implicit in the whole Kickstarter experience from day #1 is that projects may fail. The thing that I think Kickstarter could/should do is put this in large and prominent text on each and every project page rather than to bury it and to make it implicit. But since Kickstarter profits from the projects they do not do this, because if they would do it likely less projects would get funded.

So they push the responsibility back for to the project creators rather than that they, as middle-men properly inform the counterparty. In that sense they are clearly and unambiguously on the side of the creators and not on the side of the backers. This is smart from their perspective in a monetary sense, but ethically it leaves something to be desired: they could easily do a better job here and they have more than enough data to support the thesis that Kickstarter projects can and do fail. Note that Kickstarter defines 'success' as 'got funded', not as 'delivered on the pledges'. As far as Kickstarter is concerned, when you're funded they're done.

https://www.researchgate.net/figure/Delivery-rate-for-Kickst...

A good 40% of all Kickstarters does not deliver anything, ever. And the remaining 60% is split 50/50 between those that delivered on time and those that delivered at all. And that split can differ substantially between one kind of Kickstarter and another, hardware in particular is difficult and has a high failure rate, even for projects with massive backing.

So, I'm not blaming the project initiators as much as I do Kickstarter, they clearly can do much better at informing potential backers of what they are getting into and the failure rate of projects (do deliver) within that particular segment, independent of the particular initiator (though their reputation could change that) should be prominently displayed on the pledge page. I won't hold my breath for that to happen though. Never trust a man etc...

"Not all projects fail" is not the same thing as "creators don't have to fulfill".

Again this is why you run the Kickstarter through a bespoke LLC as that shields you from liability if you can't deliver.

Having a bankrupt LLC makes you judgement proof and thus un-sueable unless they can pierce through the corporate veil because you committed fraud or something similarly terrible.

Again it can both be true that they legally must deliver but there is nothing you can do if they don't.

> Again this is why you run the Kickstarter through a bespoke LLC as that shields you from liability if you can't deliver.

There is fairly high correlation between Kickstarters that are run through a bespoke LLC and Kickstarters that fail to deliver, for me that would be a reason not to back a certain Kickstarter.

I see Kickstarters mostly as a way to spend a tiny bit of money to enable particular artists and hackers to pursue their dreams, a subsidy of sorts. And if it ever does result in a thing delivered to my door I'll be pleasantly surprised but my expectations are low and the stats to date mirror the larger stats available about campaigns fairly closely. Approaching Kickstarter in any other way will surely lead to disappointment. Suing someone because they failed on a project would radically change the nature of Kickstarter and even though it has happened I would like to see these reserved for those cases where the initiator clearly never planned to deliver anything in the first place. These happen often enough that it is a real problem.

Your position is that Kickstarter was 'an obligation-free playground for tinkerers' remains in contradiction of their stated terms of use (now clarified). Kickstarter differentiated itself from gofundme by introducing backer rewards and pretty quickly it looked exactly like the thing you say it wasn't: a place to preorder products.

> I'm not blaming the project initiators as much as I do Kickstarter

You entered this thread blaming _backers_, caveat emptor style. All the stuff you mentioned upthread was added / changed post 'day #1'. You can even read the discussion on HN from the time https://news.ycombinator.com/item?id=4551245. In 2023 "don't kickstart with money you can't afford to lose" is reasonable but in 2012 the terrain was much foggier.

I have presented evidence and have argued from the position of a backer, a project initiator and Kickstarter itself. Each of those have different goals and expectations and each of those try to ensure that their goals and expectations are satisfied even if they are not perfectly aligned.

The reality is: 40% of Kickstarters never deliver. And only a very small fraction of those results in refunds. An even smaller fraction results in legal action and only a small fraction of those results in payouts to the original backers in excess of their legal costs. So even if you are right in the narrowest possible sense the fact remains that if a Kickstarter does not deliver you are likely going to lose your money.

Backers should be aware of this, should never back a project with money they can't afford to lose and should assume that there is a 40% or so chance that their money will be gone.

In 2012 there were enough people saying the same thing. This all started with arguments that Kickstarter is pre-ordering and that it functions as a store. Neither of these are true.

The simple reality is that you are giving a bunch of money to a bunch of strangers who will possibly try to deliver on that which they have pinky promised to do. And that there is a very good chance that they will not. And that there is a very good chance that you will not be able - legally or otherwise - to recover your funds.

The 40% can be divided into a couple of fractions: projects that failed but where the initiator tried their hardest, projects that failed where the initiator did not try their hardest but they did make some token effort and they delivered something (broken, useless, incomplete, swag only but not the main product that was the goal of the Kickstarter in the first place) and Kickstarters where the initiators never had a chance to deliver because they underestimated the complexity or were underfunded from day 1 and finally those that are simply fraudulent where the Kickstarter itself was the goal, and not the thing the Kickstarter was about.

In all of these you probably will not see your money again and this has been the case since the earliest days of Kickstarter.

Kickstarter could - and should - do more to inform users of these stats. Kickstarter could - and should - do more to keep the backers safe from fly by night operators, but this would require Kickstarter to do more in terms of due diligence on the initiators, and that in turn could increase their liability. They have always tried to make it seem like they don't have anything to do with the actual interaction even though they are to all intents and purposes the advertisers, middle men, and merchant of record.

There are a few cases - that made the news, anyway - where backers have managed to retrieve some of the funds of the Kickstarter project initiators, usually using consumer protection laws. But this is not a structural thing and is more the exception that proves the rule: if the Kickstarter doesn't deliver your money is gone.

So: Kickstarter is 'an obligation-free playground for tinkerers' far more than it is a store, and far more than a place where you should have high expectations of seeing your money or a product in return for your money. Backing a project is not the same as buying a product. Fraud and failure happen, you likely will have little or no recourse.

> Implicit in the whole Kickstarter experience from day #1 is that projects may fail.

To the extent that is the case, rewards shouldn't be dependent on success (or the project should be an independent business such that bankruptcy contains liability in the case of failure.)

Also, some Kickstarters are fully developed products from established firms for which the project goal and stretch goals are set around well-researched production costs.

~40% doesn't result in deliveries, something Kickstarter could easily advertise on their pages. This stat has held true over a long period of time

The second I think is mostly abuse of the Kickstarter mechanism to push it more towards pre-ordering and marketing. It would be better if Kickstarter would not engage in these even if they improve the stats because it raises expectations for the kind of projects that Kickstarter was created for to begin with to unrealistic levels.

Amazon sells existing products. There is always a chasm to be crossed between a napkin idea and delivering a product, and your role here is closer to that of a nano-investor.

In fact, crowd investing for returns is a thing in Germany.

> You are entering a legally binding contract with the seller. They must oblige or else refund you.

Is that how it works for angel investors too?

I wish :)

The convertible debt sort of does work like that in theory ... except that the expectation is that the goal is big growth or bankruptcy while trying (in which case the debt is discharged).

Investors usually have terms which defines the contract you both agree to.

Investments usually result in an ownership transfer though which doesn't have the same kind of hard stops necessarily.

That ownership is worth exactly nil if the company fails or fails to deliver. In fact being an investor in an early stage start-up has substantially worse expectations on a per-project basis than Kickstarters. Kickstarters are 6 times more likely to succeed compared to angel investments. And when you lose your angel investment it will be a large multiple (1000x) of what you would put behind a typical Kickstarter. That increase in risk and increase in capital involved is what powers the legal requirements, and that's where there is no document with a signature on it or any legal stuff to review before you can back a Kickstarter with $50 or $100 of your hard earned money: the risk is negligible compared to an angel investment.

And investments do not necessarily result in an ownership transfer, at the seed and angel level convertible loans effectively postpone that transfer, possibly in perpetuity unless the business manages to raise a later round. Because everybody involved recognizes that if that doesn't happen there is no point in engaging in the song-and-dance of ownership transfer at a non-realistic valuation.

Your typical start-up team is far more capable in terms of business savvy than your typical Bickstarter initiator (artists, tinkerers, hobbyists, wannabe entrepreneurs) and they tend to be much less sure of their ability to bring the project to term. They will most likely underestimate their costs and runtime, overestimate their ability and availability of parts. This should factor heavily into the decision of whether or not you want to back a Kickstarter at all, no matter what the desirable features of the gadget are.

For the things I back on Kickstarter, I see it as expressing honest interest in a long tail product. It's okay if it doesn't arrive. I just want the guy to give it an honest shot. And I'm comfortable knowing that I have to be the one who evaluates whether this is a risk worth taking.

I'm glad something like this exists in the world so that other people like me can do this together with me.

I really wish people like you wouldn't use this sort of site. If you wouldn't be okay with the effort failing, then please just go elsewhere.

Exactly. If you want to use a store: use a store, don't use Kickstarter.

At the same time I've seen things come by on Kickstarter that I think they should have never accepted in the first place. They were 100% sure to fail.