Potentially Fraudulent Crowdfunding

[PyTom]

There have been a number of incidents of potentially fraudulent crowdfunding (kickstarter, indiegogo, etc.) that have been coming to my attention over the past few weeks. In some way, this stems from the success of this community - we've finally gotten to the point where fraudsters believe there's money to be made. I'd prefer that we don't go into too much detail here about accusations against individual people, as there have been some bannings over this, and I think it's unfair to go after someone who can't defend themselves. Instead, I just want to talk a little about how to protect yourself.

These are my thoughts. I don't claim to be an expert on internet fraud or anything like that, so take them with a grain of salt.

First off, I think it's really important that crowdfunding campaigns have a demo. While a demo isn't dispositive, it's probably the best way to tell if the team behind the game is likely a real time. The existence of a polished demo means that someone thought the game was worth investing some of their own time into. Looking at the demo can also give you a good idea of how real the game, and the team behind it, is. If a demo uses stock art, photo backgrounds, and creative commons music, I'm reluctant to back it - it shows that the team isn't fully together yet, or isn't willing to invest their own time into the project, or perhaps there's just one person involved. Those are warning signs, at least to me.

If there's no demo, the project shouldn't be posted here. But it often takes us a day or so to find those links and edit them out. While there have been legitimate teams that didn't go with a demo, it's a big red flag for me - I don't know what the end result will be.

Take a look at the person or organization behind the game. If the contact person isn't involved in the project, except to hold the money, then that could be a warning sign. (However, there are publishers that seem to specialize in this - and a known name might make a game more trustworthy.) Remember, the person listed on the kickstarter is the person responsible for the project - if they're not in a position to influence the final game. If the contact person is entirely fictional - run away. (I've seen this happen.)

It probably makes sense to check out important members of the project (like artists and writer), and see if they're onboard. It's been my experience that active members tend to promote on social media. If that's not happening, it might make sense to ask why. I always like to see established teams. If a team has worked together to release previous projects - say, a NaNoRenO game - I take that as a really good sign. While it's impossible to guarantee the future, previous work would seem to make a total scam less likely, at least in my opinion.

Try to get a feel if the funding asked for is reasonable for the work that needs to be done. Asking for small amounts of money is a warning sign, IMO - it's pretty unlikely a commercial game can be created for tiny amounts of money, and small amounts of money mean that less people have to agree with you about the legitimacy of the project before it funds.

Take a look at the track record of the creator on Kickstarter and other crowdfunding sites. Inconsistent use of names is a big warning sign - but going from a personal to a studio name is more likely. Going back and forth between names is a big red flag. Make sure people disclose previous campaigns, and use common sense - if they previously claimed it would take $10k to make a game, and now claim it can be made for $750, find out why.

And lastly, don't crowdfund with money you can't afford to lose. Sometimes, even people with the best of intentions are unable to complete their projects. The work is harder than they thought, they hit creative blocks, or it just doesn't work out. Crowdfunding is an incredible way to try to influence the world - voting with your wallet to ensure the projects you are interested get backing. But it involves risk, in exchange for possible reward.

Again these are just my feelings. Let me know what you think.

[Kailoto]

I'd agree with pretty much everything here, especially about being wary with crowdfunding in general. Even disregarding fraud, crowdfunding is a financial risk, and it's up to the backers to balance risk and reward before committing to a decision.

Other people might have problems with demos being required, but if you're going down the path of crowdfunding, it seems more than fair to me. Development requires money, and if one can't supply that money themselves or find the backing of a publisher, then I expect them to put even more effort than ordinary into being transparent and punctual. Releasing a demo is not only a good way of providing evidence that you have the potential to complete the project, it's also better for your project's popularity and allows you to market your product much more effectively. If someone who turns to crowdfunding is unwilling to put together a demo, especially after this point being made, I would be suspicious immediately.

Anyways, I support LSF's current stance on this topic wholeheartedly, and don't think there's much else to add.

[Hazel-Bun]

All very good information. Also, try to reach out if possible. I know the guy behind Get me off this planet! and it really helped me be more comfortable in the process. One still animation I funded reached out to all backers all together. Clear breakdowns on the page of where funding is heading is also good.