>As I recall, kickstarter originally had a requirement of giving money back if you couldn't deliver--which was never very practical. Getting money from a stone

>As I recall, kickstarter originally had a requirement of giving money back if you couldn't deliver--which was never very practical. Getting money from a stone sort of thing. Of course that can be a requirement, and you've given a great example of financial confusion that I've seen come up a lot in crowdfunding discussions: "requirement" in no way means "assurance". The actual final outcome comes out of the interaction of various pieces of law with different goals and the priorities established in the financial setup. It's like any debt, it's "legally required" to be paid back to the extent allowed under law, but that doesn't mean it will be, defaults happen. If a debt is defaulted on then what process happens next is very important to a functional economy. So it's fine to say "you are required to do x," what that translates to though is more "if you can do x, then you must do x", and by default it leaves what happens "if you can't" undefined (or here falling back to the generic overall processes, which weren't made with this instance specifically in mind of course). In turn that's why it's not a "donation", they do in fact have performance requirements. They could not for example finish the project, reaching all milestones, and then suddenly say "nah actually we're not going to give backers anything we said we would after all." Or if they offered alpha access for a given price, and someone paid that, then with the alpha out that person should be offered access. They can't just go use the funds for any random thing, and if they can deliver they need to do so. But that they're "required to do so" doesn't mean they can't fail. They aren't allowed to pierce the veil, but there is still management discretion. Etc. But it's also not a "preorder" because nothing exists. "Preordering" really does have legal requirements of its own in many jurisdictions, such as not being allowed to hold money or a reservation for money even more then a short period of time without explicit permission for extension (that must be repeated every additional period), or not being able to collect at all before shipping. So the real missing piece I think is better defining the failure process and making it give better results for the backer population. What say do backers have in a project going outside its proposed bounds to a great degree? In a failure, what place in line do backers have vs any other creditors? What are they entitled to beyond any division of pure asset liquidation?