Nov 23, 2015

Kickstarter Lesson #3 Finding a Kickstarter Approved Citizen forProject Creation

One of the biggest headache for any creator who wishes to launch their project at Kickstarter is to find a friend who is willing to help you to be the project creator. As of now, Kickstarter limits the nationality of the creators to the following countries:

USA, Canada, UK, Australia, New Zealand, Ireland, Netherlands, Sweden, Denmark, Norway, Spain, Germany, France,  Austria, Belgium, Italy, Luxembourg, and Switzerland.

There is a few ways to do this but I will discuss the simplest way: Getting a friend or helper to help you.

Firstly, the helper must meet these requirements:

  • You are 18 years of age or older
  • You are a permanent resident of one of the country either creating a project in your own name or on behalf of a legal entity with a Business number.
  • You have a bank account, registered address, government-issued ID (driver's license or passport).
  • You have a major credit or debit card
When we first started looking for helpers, we were faced with many problems with concerns on the risks on both parties. Let me share more on the risks.

Risk for the Helper

Tax Liability
We have done many research on the issue whether the donations from Kickstarter is considered as a business income or as a donation. The premise of Kickstarter is that the backers donate a sum of money which the creator will reciprocate with a token of appreciation. This is akin to you donating a sum of money towards a building a church or a school and in appreciation, name a building or fountain after you. However, there is currently no clear laws around the world to consider this as an income or a donation, so we often have to era on the more conservative side and consider the pledged amount to be income. This creates complications for different group of people. For helpers who have a job, tax filing in many of these countries are extremely complex, costly and an overly successful Kickstarter campaign may push your friend's income tax to the next tax bracket. For helpers who does not have a job, this may affect their welfare benefits or any benefits that may come along for not working. As a Singaporean whose personal income tax is low and welfare benefits are virtually non-existent, it took us some time to understand where so many of our overseas friends are not willing to help.

Default Liability
There has been Kickstarter projects whereby the promised rewards are not delivered at all. In this case, Kickstarter may hold the helper liable for not fulfilling the reward. This makes many helper distrustful if you are not a trusted, close friend of theirs. What is there to prevent the people who is running the campaign to just disappear over night, leaving hundreds of angry backers banging on the doors of the poor helper, either demanding their money back or their rewards delivered

Risk for the Creator

Bank Account Issue
For the Creator who is looking for a helper in another country, the biggest risk of the Creator is that the funds will be deposited into the bank account of the helper. If the helper is not a close and trusted friend of yours, there is a chance that the monies from the Kickstarter campaign will be withdrawn and the helper disappearing into thin air. In that case, the creator will also be forced to produce the rewards to the backers at a total loss of capital, else risking their reputation in their industry.

Risk on Both Sides
Given that there is risks on both sides for this arrangement, trust and friendship is crucial when creating a Kickstarter campaign using this method. A less risky way is to create your project on Indiegogo or your local crowd funding platform  . However, one of the most important ingredient for any crowdfunding platform is that there must be a crowd monitoring the site in order to increase the chance of your project succeeding.

Here are the Alexa ranking for some of the popular crowdfunding sites in Singapore and globally.  Alexa Rank:384 Alexa Rank: 1152 Alexa Rank: 1,252,220 

1 comment:

  1. Many many thanks for your amazing post. You can get more ideas from below link.

    Kickstarter vs Indiegogo


Related Posts Plugin for WordPress, Blogger...