Good-o: Kickstarter Becomes Public-Benefit Corporation

Crowdfunding platform and dream machine Kickstarter are now a public-benefit corporation. Basically, they’re still a for-profit company but now a positive impact on society is part of Kickstarter’s legally defined goals too.

The announcement’s interesting because often large companies are beholden to shareholders and required to maximise shareholder value – i.e. make money. Obviously, this is not always compatible with, y’know, benefitting people who aren’t shareholders. So becoming a public benefit corporation looks to be a good thing, but will it particularly affect your experience of Kickstarter?

Looking at the mission statements which make up this PBC charter it’s things like creating tools and resources aimed at helping people bring their projects to life, never selling user data to third parties, not exploiting tax loopholes, being environmentally conscious, donating 5% after-tax profits to arts and music education and organisations fighting to end systemic inequality. There’s also provision for employees to pursue their own projects and so on. You can read the full list here – it’s decent stuff.

An over-optimistic part of me hopes that changes users might actually notice may come out of the part of Kickstarter’s charter saying they must “care for the health of its ecosystem and integrity of its systems.” But right now that looks impossible to balance with the terms of use which make it clear Kickstarter aren’t responsible for projects not being fulfilled.

The company insist “Kickstarter does not guarantee projects or investigate a creator’s ability to complete their project”, which has lead to a few people being bummed out by undelivered projects. If people are taking creators to court over projects which didn’t materialise, the ecosystem is a little unhealthy.

Yes, Kickstarter aren’t responsible for wonky projects, but they’re part of their ecosystem so it will be interesting to see whether becoming a public-benefit corporation has an effect on how involved Kickstarter are in individual projects. I don’t have a good solution in mind for this. It’s impossible – and probably undesirable – for Kickstarter to try to vet projects, and I suspect they’re not able to cover the cost of refunding things themselves. So… maybe expect nothing on that front. At least not directly. But perhaps the other elements will have a knock-on effect.

24 Comments

  1. kowalification says:

    I see Fig as the successor to Kickstarter when it comes to video games. Actual quality control of the proposals and the possibility of investing in a given game.

    Serious developers would be SUCKERS if they went for Kickstarter now that Fig is going to comply with non-accredited investor legislation. Likewise, regular ol’ crowdfunders would be IDIOTS for going with a Kickstarter campaign, on account of the fact that there is actual quality assurance going on.

    So, yeah… Kickstarter is going to wither when it comes to gamers. That much is obvious to me by now.

    • phlebas says:

      The same way Google Plus has totally taken over from Facebook?

    • DrollRemark says:

      You mean the same Fig that has only had a grand total of one campaign so far, which barely scraped by it’s target after some slightly opaque investment funding totals, and is apparently going to only ever run one campaign at a time?

      I think we should probably wait a little before proclaiming Kickstarter’s death.

      • Kitsunin says:

        Is it true that it’s only ever going to run one campaign at a time? Because if so, no thank you. The reason I support Kickstarter and Indiegogo is because they are open platforms which anyone can use.

        Similarly I appreciate accountability, but at the same time, game development is a risk. I can get behind a service which does its upmost to ensure developers aren’t being shady, but if a project goes belly-up because it just doesn’t work out, I’d really rather my money vanish than the folk I gambled be screwed for it.

        • Baines says:

          The early news articles said that it would be limited to a few campaigns at a time. One of the selling points was that it would be a curated system, where only approved games would be allowed.

          It is questionable whether the companies that have prominent members on the advisory board will see preferential treatment. It has already been stated that Double Fine, inXile, and Obsidian (all of which have prominent figures on the advisory board) will use Fig for coming games.

          Wait, Fig’s main page proclaims that its first project saw over $750,000 in “investment interest”, but Fig’s page for Outer Wilds says that it raised $126,000 (barely passing its $125,000 goal)?

    • Xocrates says:

      Fig will need a massively successful campaign before it takes off, and since it’s likely to focus on big name games a lot of good games will never have a chance on there.

      Kickstarter users that know how to use kickstarter will keep using it. I have no problem in what Fig is trying to do, and it’s certainly a good thing, but I will be very surprised if it ever surpasses Kickstarter on the games front.

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      Ninja Dodo says:

      Look, I get that the internet is not conducive to MILD and NUANCED statements, but labeling anyone who chooses Kickstarter over Fig a sucker and an idiot is a bit much.

      Fig seems like a good initiative that could lead to some great projects getting funded, but it’s clearly not for everyone… not least because “it’s highly curated and will include only those games reviewed and accepted by its board of experts. And Fig will have just a few campaigns running concurrently at any given time” (source: link to wired.com).

      This means only very few games with larger teams and budgets (independent AA or triple-I if you like) are likely to get selected for Fig crowdfunding, which leaves many many projects that will be better suited to Kickstarter or Indiegogo.

    • tomimt says:

      Yeah, no. Fig has barely gotten off the ground. Or better yet, while their first funding run was succesfull, it hasn’t yet gotten off for good, nor made huge ripples on the pond of crowdfunding.

      Fig might become the next goto for game projects, but at this moment it might just as well die off within a year (or even sooner than that). I know the big boys, inXile, Obsidian and Double Fine have promised to throw a project each there, but that doesn’t necessarily mean that the platform will be a success story for the ages.

  2. Gap Gen says:

    So, 5% good then.

    • Gap Gen says:

      Just to clarify a for-profit organisation donating 5% of its income to organisations “fighting to end systemic inequality” is a bit like incendiary bomb manufacturers and flamethrower companies clubbing together to send a $100 cheque to the New York firefighters.

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        heretic says:

        Bit harsh! Are you saying that all for-profit organisations promote inequality? That would include everything from your megacorp to your corner shop…

        • The Godzilla Hunter says:

          Don’t you know, simply making a profit is evil. No for-profit company has ever done anything of value to society! (he types on the computer built on technology largely created by for-profit companies and, er, the military).

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            Qazinsky says:

            There is no nuance, only good or fiery inferno, apparently!

          • The Godzilla Hunter says:

            Oh, there is definitely nuance. I did not mean to imply that all for-profit companies are good, merely that the act of making money does not preclude the act of doing good, or that inequality is only measured in money. If I buy food, I do have less money, but I am better off than before I had no food.

          • Arglebargle says:

            Ah, really, computers exist pretty much because the basic infrastructure was funded by the military and the government. It was not dreamed up in the garage of some wacky but brilliant inventor.

            Same thing with the tons of industry depending on satellites and other near space objects. All built on the backs of money and accepted risks of military and government expenditure.

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            Qazinsky says:

            @Godzilla Hunter, I was more or less just joining in with your comment, I understood what you meant. Essentially, it’s not good vs evil, the question is where we draw the line. Also, the first post seemed very focused on starting fires for some reason.

  3. Text_Fish says:

    Bloody hell, why are there still people who get sniffy about failed kickstarter projects? Anybody who throws their money at something without knowing what it is only has themselves to blame if it doesn’t prove a worthwhile expense.

    • Baines says:

      Probably because they wish the system were better.

      • Text_Fish says:

        But that is the system. The whole idea is to fund risky projects, so to wish there weren’t any risk would be to break the system.

        • Emeraude says:

          That being said, there’s been some kind of a dishonest move with people presenting Kickstarter as a form of pre-ordering ploy.

          Some people *got* confused to a point.

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            particlese says:

            I can definitely see that being a problem, yeah. Kickstarter has all sorts of warnings to the funder about this sort of thing these days, though, no? Although if there are, I forgot about or just skimmed over them because I know the risks, and I suppose those who throw caution to the wind anyway will just look for the next “continue” button…

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        particlese says:

        Likely in part because they’re deathly afraid of or inept at learning from their own mistakes, whether or not they know it, admit it, or pretend they’re asking on behalf of the greater good. Loads of rant material right there, so I will stop after the next dot thingy.

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          particlese says:

          …except to add that I’m not perfect myself, of course. For example, I sometimes don’t post in inflammatory places at all because I’m afraid I haven’t proofread enough and will have a painfully-produced sentence legitimately ripped to shreds in seconds by an incomplete one. But sometimes I do, and I learn as a result and hopefully improve for the next time.

          Mmm…rant via simultaneously self-deprecating and self-lauditory example… All done!

  4. Devan says:

    Well, good on them. I’m not sure what the legal details are and how much of a practical difference it makes to be a PBC instead of a regular corporation, but it overall sounds like a good system.
    I’m in favour of having more non-profit companies and this seems to be a middle step.