The Kickstarter Blog

Accountability on Kickstarter

Yesterday, NPR's "All Things Considered" asked, "When a Kickstarter campaign fails, does anyone get their money back?" The story questioned what would happen if a Kickstarter project failed to follow through on its promises. The piece raised a number of questions about accountability on Kickstarter, and we want to talk directly about them today.

Since Kickstarter's launch in April of 2009, nearly 30,000 projects have been successfully funded by more than two million people. These projects include documentaries, albums, art, products, video games, plays, books, performances, food, and much more. The number of creative projects that have been funded and produced on Kickstarter in the past three years is enormous. Many could not exist otherwise.

But of course not every project goes perfectly. Delays do occur, especially with more complicated projects. Some creators get in over their heads dealing with processes that are new to them.

We take accountability very seriously at Kickstarter, and the questions raised by NPR are important ones. We've addressed a lot of these questions through the press and in various places on the site, and today we want to go over how accountability works on Kickstarter. We've also added the questions below to our FAQ. Thanks for reading.

Does Kickstarter screen projects before they launch?

Yes, but only a quick review to make sure they meet our Project Guidelines. Kickstarter does not investigate a creator's ability to complete their project. Backers ultimately decide the validity and worthiness of a project by whether they decide to fund it.

Who is responsible for completing a project as promised?

It's the project creator's responsibility to complete their project. Kickstarter is not involved in the development of the projects themselves.

What should creators do if they're having problems completing their project?

If problems come up, creators are expected to post a Project Update (which is emailed to all backers) explaining the situation. Sharing the story, speed bumps and all, is crucial. Most backers support projects because they want to see something happen and they'd like to be a part of it. Creators who are honest and transparent will usually find backers to be understanding.

It's not uncommon for things to take longer than expected. Sometimes the execution of the project proves more difficult than the creator had anticipated. If a creator is making a good faith effort to complete their project and is transparent about it, backers should do their best to be patient and understanding while demanding continued accountability from the creator.

If the problems are severe enough that the creator can't fulfill their project, creators need to find a resolution. Steps could include offering refunds, detailing exactly how funds were used, and other actions to satisfy backers. 

Is a creator legally obligated to fulfill the promises of their project?

Yes. Kickstarter's Terms of Use require creators to fulfill all rewards of their project or refund any backer whose reward they do not or cannot fulfill. (This is what creators see before they launch.) We crafted these terms to create a legal requirement for creators to follow through on their projects, and to give backers a recourse if they don't. We hope that backers will consider using this provision only in cases where they feel that a creator has not made a good faith effort to complete the project and fulfill.

Can Kickstarter refund the money if a project is unable to fulfill?

No. Kickstarter doesn't issue refunds, as transactions are between backers and the creator. In fact, Kickstarter never has the funds at all. When a project is successfully funded, money is transferred directly from backers' credit cards to the project creator's Amazon Payments account. It's up to the creator to issue a refund, which they can do through their Amazon Payments account. (Like PayPal, Amazon Payments allows refunds for 60 days from the date of charge. After 60 days, creators cannot reverse the same charge to backers' credit cards, so to issue refunds they'll need to initiate a new transaction to send money via Amazon Payments or PayPal, send backers a check, or use another method. Our support team has guided creators in how to issue refunds like these before.)

Why can't Kickstarter guarantee projects?

We started Kickstarter as a new way for creators and audiences to work together to make things. The traditional funding systems are risk-averse and profit-focused, and tons of great ideas never get a chance as a result. We thought Kickstarter could open the door to a much wider variety of ideas and allow everyone to decide what they wanted to see exist in the world. Kickstarter is full of ambitious, innovative, and imaginative ideas that aren't possible anywhere else. 

The pursuit of these projects with a guarantee doesn't work. A Kickstarter where every project is guaranteed would be the same safe bets and retreads we see everywhere else. The fact that Kickstarter allows creators to take risks and attempt to create something ambitious is a feature, not a bug.

What is Kickstarter doing about fulfillment?

As Kickstarter has grown, we've made changes to improve accountability and fulfillment. In August 2011 we began requiring creators to list an "Estimated Delivery Date" for all rewards. This was done to make creators think hard about when they could deliver, and to underline that Kickstarter is not a traditional shopping experience.

In May 2012 we added additional guidelines and requirements for Design and Technology projects. These include requiring creators to provide information about their background and experience, a manufacturing plan (for hardware projects), and a functional prototype. We made this change to ensure that creators have done their research before launching and backers have sufficient information when deciding whether to back these projects.

We've also allocated more staff to trust and safety. We look into projects reported by our community for guidelines violations and suspicious activity, and we take action when necessary. These efforts are focused on fraud and acceptable uses of Kickstarter, not a creator's ability to complete a project and fulfill. On Kickstarter, people ultimately decide the validity and worthiness of a project by whether they decide to fund it.

Comments

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      Creator Richard NL on September 6, 2012

      @Jeffrey Kesselman - Interesting they handle it that way in terms of what a project creator gets to see. Would think there would be a bit more detail so that a creator can manage funding optimally.
      @Carl Bussema - More or less. A class action suit against an individual creator probably doesn't make sense given the amounts involved, having to find backers from your area to enjoin, etc. As it is, starting a suit against a creator is difficult at best and financially unattractive to begin with; if you backed a project for $20, would you spend $1,000 and a chunk of your free time up front to try to get that back? KickStarter even said this themselves in an interview with Polygon:
      "Kickstarter advisor and board member Sunny Bates doesn't deny the risks of pledging but argues the price of individual Kickstarter pledges is so low that even if fraud did rear its head it wouldn't be worth the legal action from a backer.
      “Here’s the deal,” she tells Polygon. “It’s one thing to be scammed like Bernie Madoff, where you’ve gone and you’ve been seduced by something and put in all your life savings. It’s another thing for something not to come through for $25.”"

      I know of only 1 project (so far) where legal action is in progress - and a few more where the creator has been threatened with it. In that project the backer is a lawyer himself and is doing it out of principle. On the whole of thousands of projects, though, it's barely noticed.

      Now, while Ms. Bates has a very good point, keep in mind the small percentage taken. They are essentially saying that they profit off of fraud. This is why I'm interested in seeing Ben's question answered.

      That said - I'm a backer of several projects that are long overdue and some may never even be delivered (creators not communicating), and I'm not looking to get refunded on any of them at this time. I think it was the NPR piece that highlighted there being 2 groups, or it may have been CNN's coverage - those who treat KickStarter as philanthropy and those who treat it as a pre-sales platform. I'm in the former group (any perks delivered is great, but I go into it knowing that the creator may fail to deliver - have not yet encountered any real fraud/mismanagement of funds issue). But for those in the other group, and who certainly have KickStarter's ToS and probably the law on their side, clearing up the (legal) accountability of KickStarter can only serve to benefit KickStarter and other crowdfunding platforms in the long run.

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      Creator Jamie Thomas on September 6, 2012

      Kickstarter's agreement with creators states that creators must have a working prototype and must agree to follow through on their promises to backers. If the creator, as in this case iCache, promised to deliver a product that functions as they described in the project listing (and iCache failed to do so after exceeding the projected delivery date 3 times), then how is that not a failure? According to Kickstarter's policy, in the event of project failure, the creator is required to refund the pledge. The base pledge that included the product reward for the Geode was $159.00. The project exceeded its $50,000 funding threshold for a total of over $350,000 funding. In what world can those figures be considered insignificant?

      I don't hear anyone refuting the idea that encouraging the success of small startups or helping a great idea come to fruition is a big part of the attraction of backing a project. If the creator was transparent and their only promise was that "in exchange for backing my project, you will have the satisfaction of knowing that you have supported my efforts", then there would be no future arguments. But that doesn't apply where creators promise a working product in return. Nowhere in the project listing for the Geode was it stated that our pledges were donations. Nor have I found that stated or implied anywhere on the Kickstarter site.

      Of course there is inherent risk in every aspect of life,. But in the case where creators promise to deliver a working product in exchange for payment of pledges, they should be held accountable ethically, morally and legally. That is life in the adult world.

      PS. Now that it's apparent that Kickstarter does not materially stand behind their policies, it puts the site's credibility in question. Additionally, Kickstarter's 5% take of each project's funding seems to be a lot of money for providing no more than a Website, while disavowing responsibility for its content. They need to follow their own guidelines of transparency and not bury that information.

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      Creator City Federation Inc. on September 6, 2012

      I just started a campaign with the press release out only today for that campaign. http://www.kickstarter.com/projects/lodispoto/city-federation-a-revolution-in-social-gaming Our game definitely falls on the side of established business with a real product.

      I really do not think that Kickstarter can be held responsible at all and NPR was off base with their article. CNN also covered the story but what they seem to gloss over is the fact that human beings have flaws. If they themselves are flawed and 'backers' pledge money to a project that is never done, well then we know better. It is not like they invested millions in some fake Wall Street scam that we've seen time and time again.

      This is Kickstarter, here to help complete projects. With that - one shameless plug for my own called City Federation. We intend on taking on Zynga, are from Brooklyn NY and hope some of you help support us with a product that is already better than the competition.

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      Creator Eleri Hamilton on September 6, 2012

      I think a lot of people misunderstand what Kickstarter is. It is the facilitator, the venue, for putting creators and backers in the same space- it is not the manager or monitor of projects.

      If you went to a trade show, and invested in an unreleased product, and that failed to materialize- would you call the convention center that hosted and complain? No, you'd call the creators, and if that failed to bring results, you'd call a lawyer for small claims court.

      Kickstarter works the same way. Their ToS tells the creators "Yeah, you can show off your idea here- but by doing so, you are entering into a legal agreement with your funders to follow through- if you bail, the people who gave you money can sue you.", not "If you bail, we'll nag at you until you do something, and we'll tell all your backers how to nag you, too; and we'll hook them up with lawyers, and tell them how to file a claim, etc..."

      Once money changes hands, that is a contract between *you* and the *creator*, Kickstarter's job is done- other than providing an outlet for the creator to easily communicate with all their backers. If you feel that the contract has been broken, then it is up to *you* to take appropriate steps, up to and including legal action.

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      Creator Adrian on September 6, 2012

      "Adrian, you cannot spin the legalities here.
      The *ethics* come down exactly to what project creators actually promise."
      - Daniel Kian Mc Kiernan ( kickstarter.com/blog/accountability-on-kickstarter#comment-1299533 )

      I agree; and I don't mean to "put a spin" on anything. Yes, creators have a responsibility to be honest and upfront. I've never promised anything I wasn't very sure I could deliver, and I wouldn't expect any less from other creators. Even with the best of intentions and preparation, projects can fail - I firmly believe that in cases like that, while you are entitled to expect nothing less than the creator's best efforts, it is _unreasonable_ for anyone to demand a refund.

      The concept of "investment mentality" applies just as much to creators as to backers: you should be saying, "this is what I want to do: with your help, I can make the attempt" - not, "give me your money and I'll go to the moon and write folk songs for you." It should be a fundraising pitch, NOT a sales pitch. This drives my decisions on which projects I back, as well. As a backer -an _Investor_- I carefully decide how confident I am in the project and its creator's ability to succeed. Since I have very little information on which to base this assessment, my investment is a risk - but that's what an investment is: a Risk. I expect a return on my investment, yes, but I understand that I might not get one -more importantly, that that Risk is expected as well.

      I hope I'm explaining my position well. I am not suggesting that there should be no recourse against a dishonest creator. However, any Accountability policy must take into consideration that the Risk of investment cannot be removed, and that trying to do so shows a fundamental misunderstanding about what investment really is.

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      Creator Daniel Kian Mc Kiernan on September 6, 2012

      Adrian— As has been noted various places, multiple times, though Kickstarter calls the buyers "backers", they are no more investors than anyone else making a preorder. They do not receive stock, bills, bonds, or notes. Indeed the seller may be financing investment with presales, but enterprise often finances investment internally, rather than (or as well as) borrowing funds. (It is because buyers are indeed making preorders that a lawyer had a case to bring against Seth Quest in the Hanfree case.)

      There is risk in preordering on Kickstarter, but there is risk in preordering from anyone. Indeed, risk is an element of every act in life. What distinguishes Kickstarter is merely that *most* of the peopler attempting to raise capital here would find it especially difficult to raise capital elsewhere. If anything, such sellers should have a stronger sense of obligation to buyers who take them on their honor.

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      Creator COPUS on September 7, 2012

      I grew up with the knowledge of the sanctity of giving one's word. Even if on occasion someone falls short on delivery, I still ascribe to that concept. Creativity - and backing of creativity - has always and will always continue to involve risk. As both a creator and backer, I am happy to be a part of Kickstarter's innovative approach. http://www.kickstarter.com/projects/1417019336/to-the-journey-we-give-everything

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      Creator Gizmosis on September 8, 2012

      I am a huge fan of Kickstarter and love the open platform for getting projects off the ground that would otherwise not see the light of day! However for any backer of a project where they are likely to receive a product and their pledge is more than $100, there is an expectation that they will see something for their investment. Of course some people will pledge $500 because they just want to support someone and others will pledge $500 because they really want the product. It is pointless arguing what the reason is that someone should back a project because each has their own reasons and at the end of the day, all money will assist the creator.

      Broadly speaking, failed projects fall into 2 categories: those that fail to deliver because of inexperience or circumstances, and those those that are fraudulent in nature. The latter is more problematic because it is difficult to determine a project creator's intentions. However when it comes to projects that fail due to either unforeseen circumstances or just inexperience then there are probably some things that could be implemented to reduce these.

      Crowd funding is a legitimate platform to raise capital to produce a project but it is also an attractive option for people who may have never created something before in this manner. And whilst simply standing in front of a 3D printer and proclaiming in a project video that "we have spent months working on a prototype..." , this on it's own does not constitute enough evidence that a creator can deliver.
      So whilst it is difficult to determine if a creator has the ability to complete a project, it would be good if there could be some supporting structures in place for those creators that truly want to succeed but may fall short in their level of experience and knowledge.

      One site I have seen that "appears" to do this well is http://start.ac/what-is-start where they have mentors that are available to assist project creators during the project's life and then further assist in a more dedicated capacity after a project is funded. They also have a review system for backers to score the project creator.

      Whilst there are no guarantees, all of these things can assist a project to be more likely to be fulfilled.
      However you view it and whatever your intentions, Kickstarter is a wonderful doorway to creations that would not have existed by any other means and it too is undergoing growing pains as it evolves. But sometimes if you want to be part of something on the cutting edge, you have to be prepared for a few paper cuts along the way!

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      Creator Garth on September 9, 2012

      I might not have created my own KS campaign if this policy had been in place when the campaign went up. It's unreasonable to expect a small-scale artist, organization, or company to be able to have reserves in place to be able to cover refunds for a failed project. By the time it becomes clear that a project will not succeed, the money will have already been spent ON THE PROJECT. To have the KS pledges include an obligation on the campaign to repay to the backers in the event of failure is completely unrealistic.

      This policy puts WAY too much power in the hands of backers, and takes an enormous amount away from project creators. "True" investments always come with a rock-solid legal proviso that all money is at risk, no returns are promised, and an investor might lose everything and that's their own fault. Why should a kickstarter campaign, most of which are extremely small scale, and would be unable to defend themselves against legal threats, be held to a much, MUCH higher standard?

      Kickstarter should be supporting project creators, not backers, here. As I recall, the previous policy, though vague, made it clearer that campaigns weren't making any promises, and that pledges weren't pre-orders or investments, they were basically gifts that the campaign expressed it's gratitude for with a reward. There's no reason not to have the policy explicitly state that pledges are made at the backers risk, and that rewards and project completion are not guaranteed by kickstarter or the campaign. Kickstarter was created, as I understand it, to allow crowds to fund projects that otherwise would struggle to come into existence - usually, projects that were too small scale to attract investors, or did not have the commercial potential to be profitable, but still had artistic or other merit. Kickstarter wasn't intended to provide backers with a way to shop. KS isn't about investing or buying things. It's about providing support to creators to realize their vision.

      The real issue here seems to be Kickstarter covering it's back over liability for fraudulent or failed projects. But it's really on Kickstarter to prevent fraudulent projects - it seems as if they simply don't want to invest in scaling up their screening apparatus to more fully investigate the projects they list. One method might be to require a pre-payment from project creators of %50 of the final kickstarter fee of the campaign goal (or simply a fee of $50 or $100), which would be deducted from Kickstarter's cut of the final campaign amount.

      I think KS should also think about the flip side of this policy. It's obviously legal cover for the day a big project fails and no one gets their money back. It says that the liability rests with the project, not with KS. But think about the message that's going to send to other potential KS campaigns. It says that creating a campaign is creating a legal liability for the creators the SIZE of the campaign. The bigger the campaign, the more the risk FOR that campaign. Why would anyone take that on their shoulders, especially when anyone with an internet connection can back a project, including crazy litigious strangers?

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      Creator Barna Farkas on September 9, 2012

      I have been wondering this question since the day I saw kickstarter emerge.

      I can't believe it took this long for someone to ask the question...

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      Creator Richard NL on September 9, 2012

      @Barna - That might be because the question has been asked many many times in the past. This may just be the first time that it is addressed on the blog.

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      Creator Jashan Chittesh on September 10, 2012

      I'm really surprised to see people call backers "customers". That's about as backwards as one can have it, IMHO.

      These platforms are called "crowdfunding platforms" for a reason - not "crowd presales platforms"!

      If you back a project, that's exactly what you do: You give money to someone to support them to do something. Of course, you *want* that person (or organization) to succeed - and your part in their success is the money you give them. But that's it. Of course, you don't expect to fall victim of fraud - so if a campaign seemingly is fraudulent, that's something that needs to be determined by a hopefully just legal system with all the relevant consequences. Failure, however, is not fraud. And most successful people have their fair share of failure as well. So, failure is by far not as bad as many people try to make it sound.

      As long as someone is giving their best effort (and what that means can be very different from individual to individual / organzation to organization, hopefully you checked the campaign thoroughly enough to have an approximate idea of what "best effort" means to that entity), so, in other words: as long as it's not fraud, I find it rather naive to complain when things don't work out as expected.

      Instead, consider supporting those people. Obviously, they made a mistake - that's the way people learn. But if all you can offer is complaints, you're the one making a mistake - because in most cases that's not helping at all. The stone you're throwing might in fact be the one that finally makes someone give up.

      Imagine, if instead of complaining you can offer something that may help turn the project around for good. And if the project really completely failed with no chance to turn it around - be compassionate. Maybe that was the last lesson someone had to learn before they make something really big happen. If they don't try again - that opportunity will be lost. If they do, because they understand that failure isn't the end of the world and dare to take a risk again, maybe that opportunity will come to fruition. We wouldn't have any of the great things we have today (electric light, for instance?), if people gave up due to failure. And you can still play a part in making the difference between the one or the other.

      That's what "backing" means.

      And if that's not understood - it may be wise to keep your money for yourself because your greed is just ruining the whole system. Bye bye and thank you for the fish ;-)

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      Creator Daniel Kian Mc Kiernan on September 10, 2012

      Garth— This statement does not *add* anything concerning project creator liability that was not *already* in stated policy; it simply affirms what was already there — incluidng Kickstarter's unwillingness to assume responsibility for issuing refunds.

      Jashan Chittesh— You're wrong from the perspective of the law, and from the perspective of ethics. Project creators who will not offer refunds in the event of project failure need to state that up-front, as a contractual condition. They'll have considerably greater problems raising money if they're not promising anything, but that's just tough for them. If Kickstarter started working as you propose, then it would become a magnet for grifters, and implode. If you think that I'm wrong, then I encourage you to get what you deserve by starting exactly the sort of site that you want Kickstarter to be.

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      Creator Garth on September 10, 2012

      The policy *is* different than it was when I had a campaign a year ago. At that time, the language (for project creators) was something like 'If your campaign fails, you should do your best to return any funds.' It certainly wasn't a requirement of the terms of service. As someone who does a lot of work with contracts, it was something I looked into pretty thoroughly at the time before creating a campaign, to be sure I wasn't taking on an unfulfillable obligation. (My campaign was successful, and the project is on track for completion).

      I don't have a problem with Kickstarter saying that they won't give 'refunds' to backers (quotes b/c my feeling is that up until now, backers have been making donations, not purchases). I do have a problem with their requiring project creators to do so - it's unrealistic, and seems to be antithetical to the very purpose of the site.

      There's also no apparatus in place for conflict resolution between backers and projects. This policy creates problems for everyone who uses the site by creating rights and obligations all over the place but offering no means of either excercising those rights or realistically fulfilling those obligations, in the evnt of a project failing. B/c of this, I don't think KS is even going to be successful at protecting themselves - in fact, they are probably leaving themselves open to a class-action suit by every single user of the site. I gotta wonder if they have any legal counsel at all.

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      Creator Jay Gondelman on September 10, 2012

      I am a huge fan if Kickstarter. But I don't think they take this subject that seriously. I noticed this project and immediatley knew it was a scam.
      http://www.kickstarter.com/projects/526090657/railroad-style-hand-car-for-cowboy-camp-burningman
      While the project was live, I sent KS an email stating that something wasn't right with it and could they look into it before anyone got taken for money.
      There is no information about the creator. No information about how he's going to build the project. No updates. No comments. Not one picture. It looks like the page was put up by journalist as a joke to see people would contribute money to a project with almost no information.
      The project went on, fully funded. A month has now passed. Burningman is done. And still not one comment, update or picture thanking the 32 backers that gave him $1200.
      I feel bad for those 32 people. They got taken for $1200. And in my opinion Kickstarter was warned about it and could have stopped it.

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      Creator Nathan Reed on September 10, 2012

      Instead of a rating system, perhaps an addition to the "View All" page where a radio button with "received, not received" could be used to track the number of successful projects that have delivered on their promises.

      I am just curious what the metric would be and would it change the face of KS, right now the popularity is surging with the corresponding increases in both good and bad projects as well as a changing dynamic in backers becoming more like customers.

      With games becoming more prevalent and those companies using KS to get products launched sooner rather than later I think the dynamic is changing from "pledges" to "pre-orders" all to the benefit of KS and as such they would not want metric of failed deliverables coming to light. Something that KS does not track because they got their cut already.

      If true numbers were known, then faith in the system would accordingly go up or down, as would the fortunes of KS.

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      Creator Daniel Kian Mc Kiernan on September 10, 2012

      Garth— The policy may have been quite different at some earleir point, but if there was a change, it was well before this latest statement of policy. and a statement byt Kickstarter that creators should do there best would not, in any case, be the same as a statement that they didn't have to make refunds if they didn't deliver on their contrats. If you're someone who does a lot of work with contracts, then you ought to graps the distinction between the advice of a broker that you ought to do your best, and an opt-out clause in your contract with buyers.

      Your *feelings* don't trump what is actually stated in the project description. Where projects have been represented as charities, with no promised product, indeed “backers” are making donations. In all other cases, “backers” have made a *purchase*.

      Kickstarter has pretty obviously got legal advice. But lawyers as such aren't experts on *incentive* systems. (I actually *am*.)

      Kickstarter's model is indeed broken. But your proposals are even more broken. If project creators want to be able to walk away when they've exhausted the buyers' money, then they need to state up-front that they reserve the right to do this. I have yet to see a project creator do that, for the obvious reason that it would make buyers more reluctant to buy.

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      Creator Joel B Green on September 11, 2012

      Any chance we can get Kickstarter to incorporate some tools to track backed project, shipped rewards and ways for backers to contact each other?

      I like the concept of Kickstarter, and enjoy backing projects. I just with there was some tool to hold project developers accountable. Currently there is no way to track the number of shipped or satisfied customers and no way to see someone record of past projects....

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      Creator Garth on September 11, 2012

      Daniel - Why not just add a button to every project stating whether or not a project will offer refunds in the event it fails to complete? This would work out fine for small projects. Most kickstarter funding for projects under $10k or so is probably coming primarily from from friends/family/supporters anyway. I would have had no problem stating in my campaign that we'd not have been able to offer refunds in the event the project failed. I doubt very much a single one of my backers would expect one. But ideally, Kickstarter would codify this so it was clear that this wasn't something outside the norm. Frankly, I very much doubt that %99 of the projects on KS would be able to refund backers under any circumstances. "No Refunds' projects would most likely be the norm.

      As another commenter stated, the basic question seemed to be whether KS is a philanthropic site or an e-commerce site. Until recently it seemed to be focused on philanthropy, for which it was very well suited. It now seems to want to be an e-commerce site, for which it seems woefully unprepared. I just find it unfortunate that a site that had originally allowed many worthy projects to come into being, including one of my own, has adopted policies which seem to undercut it's own mission and it's utility to the people it was created to support.

      Certainly my next project will not use Kickstarter as a fundraising tool.

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      Creator Daniel Kian Mc Kiernan on September 11, 2012

      Garth— It is neither obligatory nor even practicably possible to signal that each an every *ordinary* thing will prevail, and that's why we normally only instead signal *deviations*. Kickstarter could indeed have a special symbol to indicate that purchasers will get their product or receive a refund. They could also have a special symbol to indicate that buyers' homes will not be attacked by rabid clowns as a result of participation. But Kickstarter sellers really only *need* to signal if-and-when buyers will *not* get refunds, or if-and-when clowns *will* attack. And a special symbol is not required in that case, but also entails no legal or ethical problems if that symbol is transparent, or is supplemented by a transparent declaration.

      Again, project creators will have much greater trouble raising money if they write their contracts to give them the prerogative to walk away if they exhaust the funds without producing the product. And, also again, if Kickstarter worked as you propose then it would become a magnet for grifters.

      Kicktarter can be used as a philanthropic site by those who openly seek charity as such. It can also be used by those who are trying to engage in e-commerce without an ability to raise funds through previously ordinary channels. The only real problem is for those who want to have it both ways — selling product profitably if their business plans work, and collecting charity if those plans do not.

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      Creator Teddy on September 15, 2012

      I don't understand why people still gambling with their money on kickstater? This statement is pretty clear "Can Kickstarter refund the money if a project is unable to fulfill?" - No. Kickstarter doesn't issue refunds -

      Does anyone here try to get support from kickstarter? I did few times and NONE of them get replied. We're not important to KS. That's why I stopped to backed any project from here. I'd better waiting until their real project on the market.

      Hopefully kickstater is not a media to just collecting 5% fee from us thru their project but PROTECT us as a backer if the project failed to deliver. Don't just tell it's our problem with the project owner!!! This is not RIGHT.

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      Creator Daniel Kian Mc Kiernan on September 15, 2012

      Teddy— It's pretty clear that the folks at Kickstarter don't have a sustainable business model. If one of the bigger-ticket projects fails, then Kickstarter will fail with it.

      While Kickstarter could not do what some people want it to do — which would be to bond each project and itself issue full refunds should any project fail — it could have been (and, as I believe, still could be) structured to survive such a project failure. The key is to recognize that, if a project fails, Kickstarter must *actively* align itself with the buyers, against the project creator.

      But Kickstarter as an institution is distracted by concern to avoid legal liability, and individuals at Kickstarter are distracted by their personal exit strategies.

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      Creator Ian H. on September 16, 2012

      It's great to hear from project creator's perspectives! I've always assumed that once I backed a project, whether or not the final product appeared and whether or not it was what I expected, the money was out of my hands. It's an investment in a company (or person), not a product. It's my responsibility as an informed investor to decide whether it's wise or not to give my money to a particular project. Once I've made that call and pressed that button, I don't think it should be up to Kickstarter to make sure I get what I want - I should've checked into things long before then.

      I know I've missed out a couple of great projects because I wasn't sure if I wanted to part with my money based on their pitch. Oh, well, if the product comes to market, I can always buy it then like an ordinary consumer.

      Kickstarter should propel innovation, not bog it down with financial responsibilities - it's our money, we are the ones who should be smart with it.

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      Creator Daniel Kian Mc Kiernan on September 16, 2012

      Ian H.— I wonder just how often people are going to chant that formula, in the hope that by repeating it they can make it true.

      Kickstarter is not a place at which to make investments. One doesn't get stock, bonds, bills, or notes here. One makes a preorder for a product where the producer is getting that money for production from those preorders, as opposed to funding production from existing reserves or indeed issuing stock, bonds, bills, or notes to a third party.

      While some people expect too much from Kickstarter itself, Kickstarter is currently delivering too little to survive. It has also been in the habit of making it seem that a project is successful for having raised the requested funds, whereas a project is not successful until it delivers on its promises.

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      Creator Yvonne Padgett on September 16, 2012

      Your user community has offered some really good suggestions on how to deal with projects not going according to plan.

      I like that funds can exceed the 100% of goal mark, but what I think was a surprise is that some of your top earners went so far above what was expected, that in an of itself may have created such a high number of fulfillment requirements that that created a new issue. Therefore, perhaps you can give the project owners a choice to fund exactly 100%, 25% over...50% over...or unlimited. Given the choice they may already have a feel for the issues that could be caused by going over the funding goal and that can allow them to self-regulate. And/or allow a campaign that is over funded to terminate the campaign before the deadline once the owner has received the amount of money they think will be enough to fulfill the project.

      I also think campaign owners should be required to fund a few other campaigns first as well both the contribute to the community as well as getting a feel for what is involved.

      Although I agree that the money people give should not automatically entitle them to a product (it's an investment in the plan that the project will be completed), a rating system that follows someone to their next campaign is a great idea.

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      Creator John E Buoy on September 17, 2012

      I have backed a few items on KS, and have been happy with most of the items I have backed. There have been disappointments also.
      What bugs me is when I have backed a product to use with my iPhone 4s. The product then gets delayed several times, and is still not available, and next week I am getting the new iPhone 5, so the backed product will be useless to me.

      Note to self: don't back products that can be outdated.

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      Creator Yancey Strickler on September 17, 2012

      Thanks for the discussion everyone. Building the right dynamics and rules around accountability on Kickstarter is something we're actively working on, and something we'll be discussing more on the blog. It's been great to hear your thoughts — thanks for sharing them.

      Yancey

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      Creator PhillipG on September 18, 2012

      this doesn't look like its working to well for ya all. check out locksport with Schuyler Towne, allegedly delivered next to nothing in outcomes and supposedly lived off supporters money and now in situation where he can't fund the project supposedly because money's been spent. Smells like fraud.

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      Creator Lawrence Ku on September 20, 2012

      Eyez™ by ZionEyez HD Video Recording Glasses is more than a year overdue, and its creators have not updated their backers with anything. It was funded on July 31 2011. Until now, nothing has been done. No photos, no plans, no progress. Nothing.

      And there is nothing Kickstater can and will do. So just be careful what you are backing. Think carefully before parting with your money.

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      Creator Tom Smith on September 20, 2012

      Wow, KS been around 3 years and they are just getting to this ? something smells fishy. By the way, KS should be accountable since the only way you found out about said project is through KS platform. How are they not part of the problem?

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      Creator Daniel Kian Mc Kiernan on September 20, 2012

      Mr Smith— Ever watched a house cat try to solve a problem? Generally, pretty sad, due to the cognitive limitations of the cat. The folks at Kickstarter remind me of house cats. If you smell something fishy, perhaps it's what they had for din-din.

      The question is of where Kickstarter falls between two extremes. At one extreme are those who themselves actively sell a product. At the other are those who merely facilitate the movement of messages between potential buyers and sellers. In this latter case, we'd be talking about things such as telephone and postal services; near to that extreme would be a classified advertising service.

      Kickstarter now wants us to imagine that they are far closer to being like the telephone company than to being a retailer of the products listed. Kickstarter has done things that undermine their claim, and it's possible that a court will someday demand that Kickstarter provide refunds; but I think that they'll dodge that bullet.

      But Kickstarter cannot survive without credibility. Unwilling to accept any sort of own accountability, they've simply depended upon the project creators to provide credibility. That approach was foredoomed.

      One the one hand, the failure of just a few relatively large projects is all that it necessary to ruin the reputation of Kickstarter. On the other hand, only when a project is quite large (more than a few hundred thousand dollars) can it provide fees to pay for a class-action law-suit; so shrewd grifters will be attracted to the creation of smaller projects.

      Perhaps the folks at Kickstarter new that what they were doing could not work in the long run, never expected the business to endure, and are just milking it for what they think that it's worth even as they plan new ventures. But it's actually a business that not only can still be saved but could provide a substantial flow of money for some indefinite length of time.

      But they'd have to stop thinking like house cats. Instead of a tunnel-visioned fixation on avoiding liability, Kickstarter would have to see how, at acceptable cost, they could do more to protect buyers. They could promise to take specific, visible action against project creators who defaulted; those actions would be focussed on somewhat increasing the prospects of recovery for buyers. Kickstarter's only increased liability would be exactly that of taking those actions, not of itself providing refunds.

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      Creator ozymandias on September 21, 2012

      So where does this leave projects like Zion Eyez? They were funded over a year ago, and have publicly stated that they not only raised 7 times the amount they thought they needed, but they have been unable to make *any* progress on their product in over a year. They have even publicly announced that they have no plans on updating backers or responding to backer communications.

      Is it the responsibility of all the backers to pool together and sue, or will Kickstarter do the ethically right thing and sue for us?

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      Creator Richard NL on September 21, 2012

      @ozymandias: As this post states, KS basically says they are not accountable, period. It's between you, the Backers, and the Creator. So yes, you would have to sue. If you want pointers on this or any legal counsel you choose would like a head-start on affairs, feel free to contact Neil Singh (registered with AZ state bar) - you'll find his contact details in the comments thread of a failed project - Hanfree.

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      Creator Aura on September 21, 2012

      I have to agree with Daniel Kian Mc Kiernan on a lot of points:
      - We make no investments or donations (though it’s interesting that every term used is chosen to make it look and feel like one); it is, like it or not, some sort of pre-order.
      - A failed project is not one that doesn’t make its funding goal (that’s just a failed funding campaign), but one that does and fails to deliver its promise.
      - At Kickstarter they’re more concerned with trying to avoid accountability and legal liability and how to get out of it should the day come.
      - Doing so does not make them more creditable or trustworthy.

      The negative impression this far, including their support, is that Kickstarter is happy to collect its 5% cut with as little bother as possible, while any negative outcome or other problems should be dealt outside and as far away as possible from Kickstarter.
      Even the screen presented to creators before project launch just sends the message “hey, if you fail to deliver, backers may go after you, but no worries about us, after we collect our 5%, we go our way”.

      From the “How do I know a project creator is who they claim they are?”
      >> Look for the creator bio section on the project page. Are they Facebook Connected? Do they provide links for further verification? The web is an invaluable resource for learning more about a person.
      At the end of the day, use your internet street smarts. <<
      There’s no obligation for creators to provide solid identity and contact information. None of the above is 100% credible sources, plus they can be altered at any point on Kickstarter (along with other things that may not sound/ be important enough for this discussion).
      I’m not even going to comment on the wise advice to use our “internet street smarts”.

      Kickstarter has grown a lot since its start – its profile, its user base, its creator base, its income. What Kickstarter needs to realize is that so did their responsibilities and obligations.
      And putting an accountability clause for creators in the form of “fulfill all rewards/ promises or refund” in the Terms of Use is not enough or in the right direction by itself.
      But the later blog post “Kickstarter Is Not a Store” and the inclusion of the “Risks and Challenges” section in the project page that links to the Accountability FAQ does not inspire any confidence that Kickstarter got (or does want to get) the message.

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      Creator Steve Bausch on September 25, 2012

      Thank You Kickstarter! (I've been saying that a lot, today :)

      Your business model and its intentions are quite charming to me, I appreciate kickstarter as a venue for creative folks to test the waters and see if anyone likes their project.

      I've spent the last few hours reading about the recent changes, and they are making me more optimistic about putting my project on Kickstarter. There was no way my proposal could have competed (for funding) with the many slick glossy proposals that could have been submitted to a marketing contest or a CGI graphics contest.

      Sincerely,
      Steve Bausch

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      Creator Jason Christopher Faught on October 16, 2012

      I would like to invite my fellow Kickstarter backers to come to a forum space where we can share information about the projects we are backing. It has a focus on game related kickstarters. Come give it a look if that appeals to you. Thanks.

      http://thewelloiledscabbard.com/forum/index.php

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      Creator Magnetic Eye Records on October 25, 2012

      thanks for the clarification. & here is a project which is definitely going to happen as the record is at the plant being pressed at this moment. Please spread the word and support music, vinyl records and small independent labels. Thank you! http://kck.st/Rb45y4

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      Creator Aneurin Coffey on October 26, 2012

      I've backed four projects, three of which have been for more than $100 so the line about loosing $25 being insignificant seems a little disingenuous to me.
      Having said that I consider all my pledges to be effectively donations with the chance of reward and I can live with that. The problem I have is where a project is clearly fraud as is the case with one of the projects I funded to the tune of $180 (plus international shipping). This project raised $196,404 making Kickstarter about $10k in proceeds of crime.
      While I don't think Kickstarter has any legal liability over accepting the money, I believe that refunding backers their 5% would be an act of good faith (although getting $9 from them could be a little insulting).
      Projects fail, I and most backers accept that I think. But more needs to be done to protect the platform, backers and project owners from fraud.
      A cynic would say it is not in Kickstarter's interest to prevent fraud as they get their cut either way - they may have decided to make as much cash as they can before the whole thing collapses.

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      Creator Christina on November 12, 2012

      This is such a load of crap. I had a project fail, and all KS did was parrot this post, and close all of my open help tickets looking for help to contact the creator who has dropped off the internet and disappeared with the cash without any word on rewards over 6 months. There is NO accountability for a KS project, and it should be made clear up front when backing a project that if the project reaches funding and the creator runs with the money (or otherwise has issues) then you get nothing, and KS will not help you to even get clarification from the creator on what happened.

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      Creator Kimberly Chapman on December 1, 2012

      I have stopped doing most Kickstarter stuff - whereas once upon a time I was enthusiastic about contributing - because of http://www.kickstarter.com/projects/soypayaso/cookie-connections-clever-cookie-cutters-cut-cleve . I got burned, now I fund less. All of the wiffly-waffly language about "we take it very seriously" is meaningless because in the end, I went to lengths to support someone on a project I believed in - including upping my contribution, spreading the word, and inviting him to multiple local events where he could promote this thing - and now the jerk doesn't even answer communications. Meanwhile he's set up a website about consumers being screwed. WTF. There is NO accountability on Kickstarter. Only give money here if you don't mind losing it if the project goes under because that's a real possibility and the lack of accountability is depressing unless you anticipate it.

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      Creator Jason Kruyer on December 7, 2012

      Maybe it would be a good idea for KS to implement a transparent system by which backers can rate creators, so that creators who fail to fulfill their promises completely can be downrated. Downrated creators would then be less likely to be able to return and repeat the process. At the same time, creators who over-promised yet delivered in the end might not get an optimal rating, but should at least be able to maintain it at a high enough level to keep posting new projects if they want. The biggest issues are probably "when do you fill this out?" and "how do you tell when there are 'haters' trying to downrate for no reason?" This sort of thing seems to have worked well for E-bay, though I can understand if there would be licensing issues.
      It might also be good to set up a rule in conjunction with this, that a user is only supposed to have one account on KS to avoid scams and hacking (though I think this might be a bit more flexible in the end. A business account vs. a personal account would be acceptable.)

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      Creator Dave McGhie on December 15, 2012

      Aneurin Coffee said:
      A cynic would say it is not in Kickstarter's interest to prevent fraud as they get their cut either way - they may have decided to make as much cash as they can before the whole thing collapses. ( This is an almost guaranteed scenario at some future date, so for now let's enjoy it while it lasts).

      After reading a few posts it seems clears that the far left users of this site apparently think dreams are all that matter and every investment is rather a flip of the coin at best , I on the other hand ( backed by the legal system) believe in dreams but require responsibility and accountability for my investment of any amount. If someone says they will provide an item for x amount of dollars then they must provide the item or a full refund. No other out come is acceptable and I for one would peruse legal action just for the point of it.

      Also, I am quite sure that after the first legal action is pursued in court the funds allocated Kick starter would ultimately be refunded to investors as keeping any part of the funds are contrary to the goods and services act.

      Kick starter should implement an accountability / rating system ASAP in an attempt to avoid or at least delay this eventuality.

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      Creator Mirka on January 4, 2013

      @Brandon Eley AND
      @Joe McDaldno

      5-rating STAR goes in the opposite direction of risk-taking culture. Innovators, pioneers, often fail and do need funds (resources to fail) remembre just 1 of 1000's inventions: The light bulb! (Thomas Edison).

      Failure in pioneering and inventing is not such. It coulbe just a step toward succes. Needs courage to get along.

      The successful ones will go on with their things (or enterprises) out of kickstarter community.

      Crediting and rewarding success also discourages taking risks for the nexts. Eventualy equals to punish early failure which with given another try would eventualy become a huge win. (Airplanes and Rocketships ways something?)

      COMPETITION IS NOT ALWAYS GOOD FOR "PUSHING THE LIMITS OF CROWDS".

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      Creator Maggie Dodd on January 27, 2013

      I think there needs to be a distinction between "failure," and simply taking the money and running. I have only supported one project that funded in September. https://www.kickstarter.com/projects/548200252/help-support-beekeeping-bees-have-a-lot-to-teach-u Deliveries to be made in October. Nada. No progress reports. I contacted creator---no response. Contacted on Facebook---no response. Interestingly, creator seems to make posts on Facebook ALL the time, 24/7!
      I do think that Kickstarter could at the very least send the creator an email inquiring about their progress.
      Really disappointed in the whole process!

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      Creator Jack Mentesana on January 28, 2013

      It seems to me that Kickstarter is participating in a scam, with Amazon acting like somewhat of a money laundering portion. When I decided to spend $45. on a "project", my "reward" was to be 2 "innovative" cutting boards. The $45. was processed in October 2012, and it is now January 2012 and still no cutting boards. I've been in contacted with "the creator", and was told they used up all the money and there will be no refund, and no accountability I might add. This is fraud, plain and simple. I will pursue this matter with Amazon, and my bank, and submit claims. This type of scheme should not be allowed to continue, and money should not be obtained from people that were led to believe there would be a product, and in essence there isn't one. Perhaps more press and media coverage of Kickstarter is in order, to uncover these types of issues. By the way, my transaction to Amazon Payments clearly states that the $45. was for the following: "FLOW by Simpleware TM Perforated Cutting Board by Ola".

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      Creator Daniel Fish on June 7, 2013

      What does KS do to stop fraud?

      See Odin's Ravens; in this case, the creator "went dark" and cut off all communication after successful funding. Aggressive follow-up by backers including communications with the other members of the creative team (against whom restraining orders were filed) revealed that the creator (Seth Nemec) did not invest in the project at all but rather had spent over half of the funding on Ebay.

      What (if any) measures does Kickstarter employ to prevent this site from becoming a home to con-artists who can make piles of money defrauding hundreds or thousands of people at a time?

      Without this question answered, I don't know that Kickstarter can really flourish as a community.

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      Creator Mike Hense on June 28, 2013

      what i find a lil disconcerting is that FACT BASED comments and/or questions, which are perceived as negative, despite their validity and relevance to the decision making of prospective contributors, are being censored, or at the least, strictly controlled...

      in a recent kickstarter effort, i know for a fact that the hype is misleading, the promo videos are deceptive, and the person in charge heavily censors the comments on his website, as well as on his kickstarter page, and will immediately delete anything he perceives as being a threat... despite the availability of this sorta information being essential to an informed decision as to fund or not fund...

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      Creator Anon on July 4, 2013

      What Kickstarter really needs, is a way for people to give feedback on the projects. If project-starters fail to deliver, it should be possible to leave a positive/negative/neutral feedback. So if a company or person starts another project, it is possible to see if he/she/it has delivered before or failed. The 25000+ negative comments on the project OUYA are not visible to everyone.

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      Creator Elaine on September 6, 2013

      I see some good suggestions interesting suggestions and some, seems to want backers to take the risk under the premise it's donation. Others, think the creator should have some responsibility to deliver, donation or not. Although the reporting thing is a good idea, it would only work on an honor system and maybe people with large amounts of successful projects under their belts under that same name. Ususally those with bunch of projects probably are the least likely to welch because more than likely they know what they are doing and built a reputation.
      But people that dont have many projects, they may fail a project or simply run off and then create new account repeat process.
      And by definition, they could make a killing, all off donations with no, in many eyes, expectations that they even have to bother to deliver. They just have to appear to be trying, which in many cases seen, communication is not a requirement of appearing to be trying.
      But that mentality may explain why so many projects actually fail or the it seems the ones that gather greater chance of success are projects around $5,000 is because the risk is all on the donor with not even a sliver of expectation of responsibility of the creator unless you go out and make a lawyer a lot of money which probably isnt worth the trouble for amounts under $10,000. Even when donating to charities, there are rules and regulations and financial reports and if a charity lie about it's finances and where they could be closed for good and sued. Yet, there seem to no expectation that a creator even have to reveal anything to the donator.
      There is a reason why many of these projects can get investment or capital from traditional sources. They are high risks and this site is for people right now that dont mind high risk. Thus I just come to view it as one of the riskiest donations that could be ever made right now. And when I'm feeling like living on the edge and being risky I donate with only thing to go by is words of some person that may or may not even exist and a few pictures and grainy vids.

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      Creator Joel et Monique Bautista on December 24

      HI everyone, we have launched “ KREMAS” one of our Haitian delights recently on Kickstarter, and we believe even if we go to family or friends but we need OTHER PEOPLE TO ENJOY in a easier way to discover projects, or they wont hear about them until it is too late, they might be interested.