This article was published on April 17, 2012

Star Command reports: What it’s really like to land a pile of Kickstarter money


Star Command reports: What it’s really like to land a pile of Kickstarter money

As Kickstarter grows, and projects on the platform land increasingly massive piles of cash, the question of what happens once a funding goal is met is increasingly important. After all, we’re simply counting down until a huge project goes down in flames, spooking users of the service.

While that is certainly true, a window has been opened into the real Kickstarter experience, and for that we should be thankful. A game called Star Command raised $36,967 on Kickstarter, far above its $20,00 goal. However, the team has burned through that money (more about that in a second), and has taken on debt to continue work on the project.

The team wrote an update to their backers, which is revelatory, honest, and in the end, very human. We’ll begin with where that stack of cash went [condensed]:

  • No show funding: $2,000 [People didn’t cough up]
  • Kickstarter/Amazon Payments: $3,000
  • Prize fulfillment: $10,000
  • Music: $6,000
  • Attorneys, startup fees, CPA: $4,000
  • Poster art: $2,000
  • iPads: $1,000
  • PAX East: $3,000
  • Tax [on income]: $2,000

That left the team with $4,000, in theory, some of which had been spent on other expenses. In other words, just getting to the point of making the damn game had nearly sapped their entire round of funding. Rule: Raise more on Kickstarter than you think you need. You will.

What else did the Star Command boys pick up? The following is critical:

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What would we do different? Keep the attorneys out of it. We got a little nervous after we received all the Kickstarter money and wanted to make sure our business was set up correctly. We registered our LLC’s, got operating agreements etc, but in hindsight a nice piece of napkin paper probably would have done just as well. You plan for the worst (we all start hating each other and people start leaving) but if anything the team has gotten closer, so it seems like a lot of wasted money. If we could take it back we would. Maybe we will get another attorney and sue them…..wait…..

A Kickstarter project doesn’t have to become a startup. However, and I don’t fault them for this, the Star Command group went the more legitimate route. Better safe than sorry, but sometimes peace of mind comes with too high a price tag.

The group, however, has more advice for anyone looking to raise funds from the crowd:

Rewards are something to watch out for as well. We just didn’t fully appreciate the cost of printing 200 posters, shirts, and more than anything shipping. Shipping is a) expensive b) a pain in the ass when you have tubes and c) time consuming. None of those things are productive. We don’t resent having sent that stuff off – we think the posters and shirts are awesome and we are super proud of them and it seems like everyone loved them, so thats great. But they were a lot of work.

Rewards are awesome, and make Kickstarter what it is. But if you are giving out a t-shirt for a $10 pledge (for example), you are going to have a bad time.

Kickstarter is brilliant, and some projects that it is allowing for the funding of are a real treat. But if you are going to raise, it will be well worth your time to make sure that you have business fundamentals on lock to prevent issues; the more you know, the more efficient you can be.

Finally, I lend my props to Star Command for doing this right, and taking on debt to see the project through. I don’t know what a Star Command is, but I plan on buying one when it comes out.

As The Daily Dot points out, Kickstarter does have material on its site to help people run successful promotions, which is a good move by the firm.

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