Ye Olde Inn

I've been seeing a bunch of stuff about kick starters, and lame as it may sound I have no clue how these work. I get that they are basically online markets to allow average consumers to invest in an unrealized project, but I don't understand the stretch goals and the possibility of the poster just not making the product. Anyone willing to fill me in?

Well, this is how Kickstarter works:

* a company puts up a product, and pledge levels. Each pledge level has a price and a reward. It usually goes upwards.
* some might have extra shipping costs added for countries outside of the company's country. Also take into consideration that you may have to pay VAT/import taxes, depending on where they ship from. (look for EU friendly logo!)
* you pick a level, and pledge that amount (plus shipping if needed). You can pledge a higher amount then the level indicates.
* the pledged amounts add up, and as soon as the goal is reached, the project is considered successful. After the time period ends, all backers will be charged, and the company will get the money to start producing.
* if the funding goal is not reached before the time period ends, nobody will get charged and the project will fail. (this may be different on other crowdfunding websites, like indiegogo!)
* stretch goals are goals that the company may include in the KS to draw in more backers. The more money is pledged ABOVE the initial goal, the more extra goodies each backer gets with their reward. (may be dependent on your pledge level though!)
* always check the company. I only back trusted companies or well established ones (Reaper, Mantic, CMoN, Queen Games, companies I trust).

the important thing to remember is that you don't pay anything unless they reach their goal.
its also worth mentioning it is NOT a market. you are not buying a product, you are investing in a company. the company usually promises that, in return for your investment you will be given a certain reward. in the case of games its usually one or more copies of that game, plus any other rewards. stretch goals are bonuses that each qualifying investor are promised once the total pledge goal has been passed.

Thanks for the info and many thanks to Tomkat for asking the question.
More details are still much appreciated.
I wanted to start a kickstarter myself a while ago when my miniatures project reached a decent point of developement, but found it much too confusing, too (it also stated that one must be an US citizen to start, so I didn't put any more efford in understanding it).

Is there anything actually legally binding here? The fact that no one gets charged unless the goal is reached makes sense, but once the company gets the money is there an actual legal obligation for them to produce? Has any company been sued or anything for not following through that you know of?

There has been a lawsuit once I believe, something to do with Bicycle cards. And some small starting companies have been extremely late with deliveries. Some delay is normal, but the established companies usually deliver on time or just a few months later as promised.

Tomkat364 wrote:Is there anything actually legally binding here? The fact that no one gets charged unless the goal is reached makes sense, but once the company gets the money is there an actual legal obligation for them to produce? Has any company been sued or anything for not following through that you know of?

i think the lawsuits have been copyright based etc, to my knowledge theres not been a lawsuit for failure to deliver. some projects have offered refunds for not delivering on time - or after a significant delay. but I don't know if they are legally obliged to. again you are NOT buying something. you are investing in the creation of something. sometimes investments fail.

there was a lawsuit, like I said, for Bicycle cards: http://arstechnica.com/tech-policy/2014 ... ons-wrath/
Don't know what the outcome was.

Tomkat364 wrote:Is there anything actually legally binding here? The fact that no one gets charged unless the goal is reached makes sense, but once the company gets the money is there an actual legal obligation for them to produce?

Yes.

Kickstarter FAQ wrote:Is a creator legally obligated to fulfill the promises of their project?

Yes. Kickstarter's Terms of Use require creators to fulfill all rewards of their project or refund any backer whose reward they do not or cannot fulfill. (This is what creators see before they launch.) This information can serve as a basis for legal recourse if a creator doesn't fulfill their promises. We hope that backers will consider using this provision only in cases where they feel that a creator has not made a good faith effort to complete the project and fulfill.

sjeng is correct their was a lawsuit it was filed in Washington