Games that could get funded from ordinary venture capitalists don't need to go the crowdfunding route.
Currently without a KS to get funded by VC's you need to prove your concept AND show that its profitable. This profitability part is why studio's cant get funded most of the time.
However with a guaranteed KS escrow account like I stated above, the money is Guaranteed as long as the project is on-time and passes the final KS Audit for completed delivery.
Only one flaw in that. If Kickstarter guarantees all donors get their money back if nothing is completed, how do the VC's get 30% of nothing, as well as the money they loaned? NO VC would ever touch anything where all the money is guaranteed to go back to the giver.
This is exactly what VC's specialize in. They wont invest in pie in the sky KS projects. They will make sure studios are going to complete the project on time and hit every goal in the KS or they don't invest period.
Everyone wins.
VC's dream about guaranteed returns like this. This is no different than having a guaranteed signed contract with a buyer if you meet delivery terms. VC's will be lining up for these studios to hand them money. I wouldn't even doubt the VC's would give them more than the KS money just because that pool of money mitigates the risk substantially.
If you don't think VC's will invest into a project that has a guaranteed payout, then what kind of projects do you think VC's will invest in?
Sure they VC will have due diligence before they get involved, making sure the studio is capable of delivering. The studio might even have to put VC on board or into the mix to monitor the project depending on how qualified the devs are. But these VC's will make sure the project is completed exactly as described in the KS and on-time. They don't want to lose their entire investment money.
If something happens where they cant meet the deadline, then they will withdraw all remaining funding, and the project will close and KS will refund all customers. Devs and VC's lose their time/money investment.
Kickstarter has around a 90% success rate, and by that, I mean, 90% of the Successfully Funded Projects were completed.
Now do the percentage for only the mmos on Crapstarter.
Kickstarter does not have a category for just MMO's but their Video Games overall, look pretty solid.
Keep in mind, only 46% of all games on KS get successfully funded, so creators have a 56% chance their Game will not get fully funded on Kickstarter, like what happened to Pantheon.
Egotism is the anesthetic that dullens the pain of stupidity, this is why when I try to beat my head against the stupidity of other people, I only hurt myself.
People calling for all this government action are missing a simple solution. Really only need consumer protection laws, where 1) kickstarter is required to give refunds for undelivered projects and 2) these businesses cannot collect money from customers without putting the money in trust or through a 3rd party like kickstarter.
Here is the solution: KS just needs to hold all money until the project is delivered as described. Any projects over $100,000 require a 3rd party auditor to verify final completion before releasing funds.
Now before you say, well they need the money to build it upfront. The way for that is they need to overestimate their costs. This way Venture Capitalists will see the accumulated funds in the Kickstarter and want a piece of the action.
If the VC's can get 30% of the money they will happily loan these games the cash. Additionally the VC's will put in place all the requirements to hold these devs accountable and dole out the cash accordingly after meeting required markers to lower their own risk.
Either way the VC's are holding the risk not the customer. The money isn't released unless it passes a final audit on completion and if it doesn't release by deadline all cash is returned to the customer.
If customer knew they were guaranteed money back by failed delivery deadline their would be WAY WAY more money put into these projects.
VC's would hold devs accountable.
Problem Solved.
Interesting solution. It might even work. Very largely dependent on how well the VCs could hold developers accountable. Equally, it might end up with corrupt VCs collaborating with corrupt devs to really hurt customers.
I'd rather see the Securities and Exchange Commission get involved (for US companies), as most of these crowdfunded efforts are treating those contributing the funding as investors only without the security provided by other investment instruments. Anything further from the government would probably be out of line.
I don't see how the VC's and Devs could collaborate to defraud customers. Because KS is ultimately legally responsible for refunds for uncompleted projects via law in my solution. So its up to KS to get 3rd party auditors so they can remove the liability before giving out the money.
Now possible VC's and auditor's can team up, but that's no different than any other business. That is what courts are for if they see fraud like that.
Kickstarter isn't stupid, the struck gold by making money but assuming none of the risk or responsibility for traditional investing.
Just trying to live long enough to play a new, released MMORPG, playing New Worlds atm
Fools find no pleasure in understanding but delight in airing their own opinions. Pvbs 18:2, NIV
Don't just play games, inhabit virtual worlds™
"This is the most intelligent, well qualified and articulate response to a post I have ever seen on these forums. It's a shame most people here won't have the attention span to read past the second line." - Anon
Games that could get funded from ordinary venture capitalists don't need to go the crowdfunding route.
Currently without a KS to get funded by VC's you need to prove your concept AND show that its profitable. This profitability part is why studio's cant get funded most of the time.
However with a guaranteed KS escrow account like I stated above, the money is Guaranteed as long as the project is on-time and passes the final KS Audit for completed delivery.
No, you have to bedazzle investors on how much money a game will make.
They regularly throw big money at relatively unproven mobile, gache, crypto studios all the time,
Just trying to live long enough to play a new, released MMORPG, playing New Worlds atm
Fools find no pleasure in understanding but delight in airing their own opinions. Pvbs 18:2, NIV
Don't just play games, inhabit virtual worlds™
"This is the most intelligent, well qualified and articulate response to a post I have ever seen on these forums. It's a shame most people here won't have the attention span to read past the second line." - Anon
People calling for all this government action are missing a simple solution. Really only need consumer protection laws, where 1) kickstarter is required to give refunds for undelivered projects and 2) these businesses cannot collect money from customers without putting the money in trust or through a 3rd party like kickstarter.
Here is the solution: KS just needs to hold all money until the project is delivered as described. Any projects over $100,000 require a 3rd party auditor to verify final completion before releasing funds.
Now before you say, well they need the money to build it upfront. The way for that is they need to overestimate their costs. This way Venture Capitalists will see the accumulated funds in the Kickstarter and want a piece of the action.
If the VC's can get 30% of the money they will happily loan these games the cash. Additionally the VC's will put in place all the requirements to hold these devs accountable and dole out the cash accordingly after meeting required markers to lower their own risk.
Either way the VC's are holding the risk not the customer. The money isn't released unless it passes a final audit on completion and if it doesn't release by deadline all cash is returned to the customer.
If customer knew they were guaranteed money back by failed delivery deadline their would be WAY WAY more money put into these projects.
VC's would hold devs accountable.
Problem Solved.
Interesting solution. It might even work. Very largely dependent on how well the VCs could hold developers accountable. Equally, it might end up with corrupt VCs collaborating with corrupt devs to really hurt customers.
I'd rather see the Securities and Exchange Commission get involved (for US companies), as most of these crowdfunded efforts are treating those contributing the funding as investors only without the security provided by other investment instruments. Anything further from the government would probably be out of line.
I don't see how the VC's and Devs could collaborate to defraud customers. Because KS is ultimately legally responsible for refunds for uncompleted projects via law in my solution. So its up to KS to get 3rd party auditors so they can remove the liability before giving out the money.
Now possible VC's and auditor's can team up, but that's no different than any other business. That is what courts are for if they see fraud like that.
Kickstarter isn't stupid, the struck gold by making money but assuming none of the risk or responsibility for traditional investing.
Yes I agree with you, no reason under current law for KS to change practice. They have a win-lose scenario where they always win and even if everyone else takes a loss.
But if the law was changed for KS to be responsible, then KS would also be forced to change or close down.
The funny part is for high dollar investors in public companies, banks etc.. There are so many laws in place to protect investors from this BS. KS should be considered an investment. Laws need to be put in place to protect investors just the same.
Comments
Currently without a KS to get funded by VC's you need to prove your concept AND show that its profitable. This profitability part is why studio's cant get funded most of the time.
However with a guaranteed KS escrow account like I stated above, the money is Guaranteed as long as the project is on-time and passes the final KS Audit for completed delivery.
Everyone wins.
VC's dream about guaranteed returns like this. This is no different than having a guaranteed signed contract with a buyer if you meet delivery terms. VC's will be lining up for these studios to hand them money. I wouldn't even doubt the VC's would give them more than the KS money just because that pool of money mitigates the risk substantially.
If you don't think VC's will invest into a project that has a guaranteed payout, then what kind of projects do you think VC's will invest in?
Sure they VC will have due diligence before they get involved, making sure the studio is capable of delivering. The studio might even have to put VC on board or into the mix to monitor the project depending on how qualified the devs are. But these VC's will make sure the project is completed exactly as described in the KS and on-time. They don't want to lose their entire investment money.
If something happens where they cant meet the deadline, then they will withdraw all remaining funding, and the project will close and KS will refund all customers. Devs and VC's lose their time/money investment.
Keep in mind, only 46% of all games on KS get successfully funded, so creators have a 56% chance their Game will not get fully funded on Kickstarter, like what happened to Pantheon.
"True friends stab you in the front." | Oscar Wilde
"I need to finish" - Christian Wolff: The Accountant
Just trying to live long enough to play a new, released MMORPG, playing New Worlds atm
Fools find no pleasure in understanding but delight in airing their own opinions. Pvbs 18:2, NIV
Don't just play games, inhabit virtual worlds™
"This is the most intelligent, well qualified and articulate response to a post I have ever seen on these forums. It's a shame most people here won't have the attention span to read past the second line." - Anon
They regularly throw big money at relatively unproven mobile, gache, crypto studios all the time,
"True friends stab you in the front." | Oscar Wilde
"I need to finish" - Christian Wolff: The Accountant
Just trying to live long enough to play a new, released MMORPG, playing New Worlds atm
Fools find no pleasure in understanding but delight in airing their own opinions. Pvbs 18:2, NIV
Don't just play games, inhabit virtual worlds™
"This is the most intelligent, well qualified and articulate response to a post I have ever seen on these forums. It's a shame most people here won't have the attention span to read past the second line." - Anon
But if the law was changed for KS to be responsible, then KS would also be forced to change or close down.
The funny part is for high dollar investors in public companies, banks etc..
There are so many laws in place to protect investors from this BS. KS should be considered an investment. Laws need to be put in place to protect investors just the same.