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Crowdfunding: Is it for you?

2016 May 1
by Michael Schroeder

Crowdfunding – it’s all rage for project creators in the past few years. If you don’t have money to fund your project but you have a dream, the internet makes it possible to fund your project with web sites such as KickStarter, Indiegogo and GoFundMe. I’m going to talk about the pros, the cons and my thoughts on using a crowdsourcing platform such as KickStarter, in particular, for a board game project. While this focuses more on board games, this can be used for any industry.

crowdfunding-article

I’ve had qualms about sites like Kickstarter (KS) for awhile now, but I also recognize their use. But recently I was looking at the comments section of a project (I’ll be quiet on this project because it’s virtually the same idea I had) and some responses stuck out to me. Other backers responses on different projects stick out to me to as well. Let me paraphrase the one that bothers me in particular.

BACKER: “I’m backing your project so you owe me detailed explanations on all facets of the project. I want to know exactly how much the cost per unit is and the delivery cost. I don’t want you to make any discretionary income on this project through the funding proceeds, but I just want to see your vision become a reality, as I believe in it as well – which is why I’m backing it. If you do catch a windfall of proceeds from the project, I hope you give us backers more stretch goals and rewards.”

That’s how I view many KS backers. But they are giving you their money, without a doubt, they absolutely expect details. Publicly traded companies have to provide honest information to investors, right? While KS backers may not be, “investors” for most projects. I’m going to slap that label on them. Why? An investor gives money to someone or an entity to fund a project or business and the investor expects a return on that investment. Well, hows that different here? I back a project on KS to see it do well and become a reality, in the hopes (for most backers at least) that they get a quality product back. Now, this isn’t always the case. A backer may give a mere $1 or so, just because they care about the project, too. But you still owe the $1 investor details. If it wasn’t for them, you’re project wouldn’t be a reality!

Don’t fool yourself and say you aren’t hoping for a profit

I’ve heard many KS creators say that they don’t care if they make a windfall profit on the project or not. I call BS. Don’t fool yourself, or others. Deep down; deep, deep down, you really are hoping to some extra KS cash to use at your discretion. And for most of you, if you disagree, you’re wrong and full of it. What am I talking about with extra discretionary income or a windfall of proceeds? For example, I create a project thats a board game. I did my homework and got quotes from manufacturers, shipping, stretch goals, if any and any other unexpected costs. Say this project will cost $20,000 to manufacturer and ship to my customers. I ended up getting $20,000 + the fees that KS takes in, plus extra income for taxes, plus  more, due to the generosity in my backers hearts. So I make $$50,000. I only needed around $20,000. I set aside my taxes, I paid my KS fees, so I have a profit of say, $20,000 (after fees, taxes, etc). That’s a windfall profit.

That’s what we’re all hoping for, right? Don’t tell me that you’re only hoping to fund your project. Sure; absolutely, the first goal is to make your project a reality. But who would scoff at making extra disposable income? What should you do with that? You should have considered the cost to print even more copies of your game or project to be able to get your game into traditional distribution channels, and or to sell it on your own web site, for full MSRP. If you didn’t consider that into the cost of the project, you should still try to get it into traditional distribution retail channels and sell it on your own site. If you don’t; well, you have some extra cash.

To the project creator that says he doesn’t “hope” for some windfall profit, BS. It’s like the person that says they are tired of dating and wants to be single from now on, and is done with dating – BS. Quit fooling yourself.

Should you inflate your funding goal so you make an extra profit? You can, but you’ll likely fail and I don’t think you should. I think you should have a funding goal that successfully delivers a quality product to your backers and also enables you to get into retail and print more copies to sell yourself. I’ve heard that backers don’t like it when you make a profit off of them. What do backers expect? Should they be shocked about that?

I eventually plan on creating a board game con in an undisclosed location, and I absolutely will depend on KS to fund this project. I need to use KS as a pre-sale system. Running a convention will be a large cost and a lot of work. Honestly, on this project in particular, I don’t “need” a profit. But I do need to break even. Why do I not care if I make an extra profit on the pre-sale backers alone? Because I’m also going to be selling tickets outside of KS, such as online, and at the door. I am hoping to work deals with other local businesses, I’m hoping to make money in other means, consider it, “in-all purchases.” Should I be expected to tell backers exactly how much extra money I’m going to make on the non KS funds, absolutely not. But hey, if I don’t get enough pre-sales and funds for the KS, the convention is not happening. And if you really want to see the convention happen, you’ll fund.

I hope you are enjoying the blog and podcast. I hope yo provide my listeners with valuable resource for game reviews and board game commentary. If you are enjoying the blog/podcast, I ask that you donate on Patreon. The URL is, patreon.com/bgd. Any donation is greatly appreciated. I am trying to have a goal of a certain number of donors to donate on a recurring basis a month to offset the costs of podcasting and to upgrade equipment. And most importantly, to validate my efforts!

Have a great night!

Michael Schroeder is a board game enthusiast, has written an eBook entitled, “Beyond Monopoly: A Beginner’s Guide to Modern Board Games” (Kindle, Apple iBook), is busy designing games and owns an eCommerce board game store, Meeple Village! He also has a podcast that complements this blog, “Board Game Dialog (also available on other podcast aggregators).” He is mike6423 on BGG.

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