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Comment by Mithaldu | Hacker News Reader

Important to note here is that Kickstarter sees two separate things in the campaign:

    1. The actual project.
    2. The rewards doled out to supporters of the project.

The Kickstarter rules are very clear about the following things:

    1. The rewards are a contract. If you fail to deliver
       the rewards on whose terms the backers supported 
       you, you're legally liable.
    2. The rewards may be delayed, as long as regular 
       communication about the actual progress happens.

Thus the project itself can fail, as long as you make sure the rewards are given out.

The fact that most project are confident/stupid enough to offer rewards that can only become reality if the project succeeds has muddled this reality in the mind of the average person, but the rules and legal realities are crystal-clear.

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Can you give a project option as a reward?

Example: $100 Dollar Level, tshirt + coupon for discount on items that we sell, available for use on target completion date (which just happens to be projected cost of baseline project item)?

Edit:

Found the answer...

> Discounts, coupons and gift certificates - Offering a reward at a lower price than what it may cost post Kickstarter is fine, but a future discount or coupon as reward is prohibited. Additionally, vouchers in exchange for a particular item (a meal, a book, etc.) are fine, but monetary gift certificates are prohibited.

A little disappointing, but I can understand why they'd take this stance. (Likely because of money transmitter laws.)

(It's possible you could still phrase it as equivalencies, eg, "one X, OR two Y, subject to availability")

That would make a lot of sense and avoid a lot of confusion. All projects that offer items that don't exist yet should only be allowed to have coupons for "1 free" or "half off" of the final product, if it's ever produced.

I guess the issue with this is there would be no incentive for the project to actually deliver the final item!

Isn't that almost the same as saying a VC funded company has no incentive to become profitable?

The FAQ remains vague on that: https://www.kickstarter.com/help/faq/kickstarter+basics

However the rules state one thing clearly ( https://www.kickstarter.com/rules ):

    Projects must be honest and clearly presented.

So i suspect that, as long as it is made abundantly clear that the coupons might end up as neat, but otherwise worthless souvenirs, it'd be legit.

It's easy enough to make the coupons exchangeable for more promo items (such as stickers, tshirts, hoodies, etc), so they're never worthless, exactly. You just might not be able to buy the project item, and only get really overpriced shirts instead.

(You could even make mod versions with "failed" on them after the fact, and use the coupons to buy those.)

Naturally, you should have giant, red, all caps letters explaining you're funding development, and might never accomplish the project successfully. Coupons only cover items posted for sale in the store, etc etc.

I'm mostly just curious about it as a legal method to give the reward at a tier without promising the exact reward.

(Side note: is this also an end-run around the multipack rule?)

This is just beating around the bush. If kickstarter wanted they could have just said that project owners are not required to provide the product since things may fail. But they don't say that because a lot fewer people would support projects.

The problem here is that as much as kickstarter wants project owners to be clear about the risks, they themselves don't want to do anything site-wide that may reduce overall revenue. At some point they'll realize they can't have the cake and eat it too.

This is the real disconnect with Kickstarter. It's not a preorder but, you are--in principle--on the hook to deliver the product (unless you don't include the product as a reward in which case you'll get a lot less interest). But, if you could actually afford to reimburse everyone if the project fails then why are you using Kickstarter anyway other than for marketing purposes.

The reality of course is that projects do fail and there may be breathless rhetoric about lawsuits and such on discussion boards but there's typically no money to be had and the online temper tantrums don't go anywhere. So the Kickstarter requirement doesn't have any real teeth.

Yeah presumably people doing kickstarters are at a minimum using an LLC, in which case if the project fails and the company goes bankrupt, nobody is getting anything from the dead entity.

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