Why Kickstarter is overrated as an investment

We all have many investing options out there.

Have you heard of Kickstarter?

Kickstarter is a crowd funding website for creative projects.

Here are some interesting facts about this company:

  • Nine out of 10 failed projects don’t even reach 30% of their funding goal
  • 97% of failed project’s don’t even reach half their goal?
  • Kickstarter takes 5% of the funds raised and Amazon charges an additional 3–5%.
  • Projects launched on the site are permanently archived and accessible to the public.
  • After funding is completed, projects and uploaded media cannot be edited or removed from the site.
  • There is no guarantee that people that post projects on Kickstarter will deliver on their projects, use the money to implement their projects, or that the completed projects will meet backers expectations, and Kickstarter itself has been accused of providing little quality control.
  • Both Kickstarter and project creators have cancelled projects that appeared to have been fraudulent.

Cancelled projects include:

  • Eye3 camera drone helicopter for unrealistic performance promises, photos copied from other commercial products, and failure of creators to deliver on an earlier Kickstarter project.
  • Mythic: The Story of Gods and Men adventure game for copying graphics from other games and unrealistic performance promises.
  • Tech-Sync Power System for failing to provide photos of the prototype and sudden departure of project creator.
  • Tentacle Bento, a card game intended to satirize Japanese school girl tentacle rape comics, after being criticized in the online media for having inappropriate content
Here is an infographic that shares more of the failures and successes.  
I personally do not see much quality control or disclosure like a proper IPO so I like to invest in “real” companies.
Have you ever invested in a Kickstarter project?

One thought on “Why Kickstarter is overrated as an investment”

  1. This brings up some good concerns. I’m pretty hesitant to give money to projects if I don’t know the person asking for money. I have given money a few times to friends’ theatre projects.

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