8 ms·

You're really not playing the part of an investor on Kickstarter or IndieGogo. An investor stands the chance to make a profit if a venture is successful. That

You're really not playing the part of an investor on Kickstarter or IndieGogo. An investor stands the chance to make a profit if a venture is successful. That does not describe the model of this kickstarter or any other one I've seen. If a kickstarter says "pledge at this tier and get x in return" that's a supplier-->consumer relationship.

Retric 8y ago
Money is only one kind of investment, regular exercise has a different but still valuable reward. Getting something that does not exist yet is the payout. Handing over money for say a 1/3 chance of the reward is what separates this from a normal purchase. But, hopefully you understand that risk going in.
- raesene9 8y ago
  The comment to which I was replying implied that participating in a kickstarter was like being an investor (from context, in the financial sense of that word). So we're talking financial investments, not regular exercise. In the financial sense, an investment is where you put money in with the hope of getting more money out. There are levels of risk, and generally the more risky the investment the higher the expected payout. That's not what kickstarter is, at all, as you have zero chance of getting more money out (in this kickstarter for example) you're giving someone money in exchange for the hope of a product downt the line.
  - Retric 8y ago
    Nothing in that post mentioned monetary returns. Still, you can get more value out than you put in depending on how you value the output. Many kickstarter’s are not items that you can buy but rather art projects. How valuable is it for something to exist in this world even if you don’t own it? Now, that’s less true if games or flashlights. But, even if that specific item does not get created simply proving a market for it exists can provide value. Consider, if 10$ helps creat a great restaurant near you. Simply being able to eat at it would provide value even without getting a discount.
    - raesene9 8y ago
      So when someone uses the phrase (which is what I responded to) "remember that you’re playing the role of an investor, rather than a consumer" you don't take from it that this was meant as a short-hand for financial investor? If not then semantic differnce, but there is a persistent meme whenever kickstarter is discussed on HN that backing is akin to financial investment rather than purchase, and I disagree with that meme. Sure you can back something purely for the hope that it will happen, and I've done that, but you're not a financial investor in that product/service/etc
      - Retric 8y ago
        It’s descriptive as you are a financial investor as you’re investing money not time etc. I think they promote the term backers which is also used for people who donate to charity. Unlike with charity you can get meaningful payout rather than a token item. Still, the highest rewards are often symbolic in nature just like charity’s “gold donor” lists etc.
        raesene9 8y ago
        To quote https://www.kickstarter.com/terms-of-use https://www.kickstarter.com/terms-of-use "When a project is successfully funded, the creator must complete the project and fulfill each reward. Once a creator has done so, they’ve satisfied their obligation to their backers. " if a kickstarter has symbolic rewards, then sure that's fine. But otherwise it's a contractual obligation to provide a reward in exchange for money. Not a donation, not an investment.
        Retric 8y ago
        A bond is a contract with specific terms and an investment at the same time. The only real difference between a kickstarter and a bond is handing back money vs handing back something other than money. Well, granted interest payments don’t compound.
onion2k 8y ago
Investing doesn't have to mean "buying equity". An upfront cash sum with a defined return is a common form of investment. That's exactly what Kickstarter is.
- raesene9 8y ago
  Not in the sense of financial investment it's not, unless the defined return is actually bigger (in monetary terms) than the investment. you're referring to something like a bond, that pays back more money than is invested. Kickstarter does nothing of the kind. There you pay money in return someone gives you goods (virtual or physical) that's not an investment, it's a purchase.
  - onion2k 8y ago
    I've worked for companies that have taken a cash investment in return for no equity on the proviso that we worked on the development of a product (or features of a product) in return. It's an investment. No return other than a decent attempt to build the product was expected. When you work in 'speculative' development it's quite common.
    - raesene9 8y ago
      hey if you've managed to get companies to give you money with no contract and no requirement for a deliverable, then good on you :) But that's not what kickstarter is and not what their T&C's say. to quote https://www.kickstarter.com/terms-of-use https://www.kickstarter.com/terms-of-use "When a project is successfully funded, the creator must complete the project and fulfill each reward. Once a creator has done so, they’ve satisfied their obligation to their backers. " You're clearly paying money to the creator in return for the stated reward, you're not investing in the hope that they might create (unless that is what was stated in the Kickstarter)
vlunkr 8y ago
You're right, my analogy is too simplistic. You're acting as an investor only in the sense that you're taking a risk, and paying to help make the product a reality. I think people often feel burned or contribute to bad projects because they're thinking of it like a normal consumer product, where the risk of getting nothing is basically 0

Retric 8y ago

Money is only one kind of investment, regular exercise has a different but still valuable reward. Getting something that does not exist yet is the payout. Handing over money for say a 1/3 chance of the reward is what separates this from a normal purchase. But, hopefully you understand that risk going in.

raesene9 8y ago
The comment to which I was replying implied that participating in a kickstarter was like being an investor (from context, in the financial sense of that word). So we're talking financial investments, not regular exercise. In the financial sense, an investment is where you put money in with the hope of getting more money out. There are levels of risk, and generally the more risky the investment the higher the expected payout. That's not what kickstarter is, at all, as you have zero chance of getting more money out (in this kickstarter for example) you're giving someone money in exchange for the hope of a product downt the line.
- Retric 8y ago
  Nothing in that post mentioned monetary returns. Still, you can get more value out than you put in depending on how you value the output. Many kickstarter’s are not items that you can buy but rather art projects. How valuable is it for something to exist in this world even if you don’t own it? Now, that’s less true if games or flashlights. But, even if that specific item does not get created simply proving a market for it exists can provide value. Consider, if 10$ helps creat a great restaurant near you. Simply being able to eat at it would provide value even without getting a discount.
  - raesene9 8y ago
    So when someone uses the phrase (which is what I responded to) "remember that you’re playing the role of an investor, rather than a consumer" you don't take from it that this was meant as a short-hand for financial investor? If not then semantic differnce, but there is a persistent meme whenever kickstarter is discussed on HN that backing is akin to financial investment rather than purchase, and I disagree with that meme. Sure you can back something purely for the hope that it will happen, and I've done that, but you're not a financial investor in that product/service/etc
    - Retric 8y ago
      It’s descriptive as you are a financial investor as you’re investing money not time etc. I think they promote the term backers which is also used for people who donate to charity. Unlike with charity you can get meaningful payout rather than a token item. Still, the highest rewards are often symbolic in nature just like charity’s “gold donor” lists etc.
      - raesene9 8y ago
        To quote https://www.kickstarter.com/terms-of-use https://www.kickstarter.com/terms-of-use "When a project is successfully funded, the creator must complete the project and fulfill each reward. Once a creator has done so, they’ve satisfied their obligation to their backers. " if a kickstarter has symbolic rewards, then sure that's fine. But otherwise it's a contractual obligation to provide a reward in exchange for money. Not a donation, not an investment.
        Retric 8y ago
        A bond is a contract with specific terms and an investment at the same time. The only real difference between a kickstarter and a bond is handing back money vs handing back something other than money. Well, granted interest payments don’t compound.

onion2k 8y ago

Investing doesn't have to mean "buying equity". An upfront cash sum with a defined return is a common form of investment. That's exactly what Kickstarter is.

raesene9 8y ago
Not in the sense of financial investment it's not, unless the defined return is actually bigger (in monetary terms) than the investment. you're referring to something like a bond, that pays back more money than is invested. Kickstarter does nothing of the kind. There you pay money in return someone gives you goods (virtual or physical) that's not an investment, it's a purchase.
- onion2k 8y ago
  I've worked for companies that have taken a cash investment in return for no equity on the proviso that we worked on the development of a product (or features of a product) in return. It's an investment. No return other than a decent attempt to build the product was expected. When you work in 'speculative' development it's quite common.
  - raesene9 8y ago
    hey if you've managed to get companies to give you money with no contract and no requirement for a deliverable, then good on you :) But that's not what kickstarter is and not what their T&C's say. to quote https://www.kickstarter.com/terms-of-use https://www.kickstarter.com/terms-of-use "When a project is successfully funded, the creator must complete the project and fulfill each reward. Once a creator has done so, they’ve satisfied their obligation to their backers. " You're clearly paying money to the creator in return for the stated reward, you're not investing in the hope that they might create (unless that is what was stated in the Kickstarter)

vlunkr 8y ago

You're right, my analogy is too simplistic. You're acting as an investor only in the sense that you're taking a risk, and paying to help make the product a reality. I think people often feel burned or contribute to bad projects because they're thinking of it like a normal consumer product, where the risk of getting nothing is basically 0