Earlier this week, crowdfunding website Kickstarter posted new rules for projects in its Hardware and Product Design category. The news was delivered as a blog post entitled “Kickstarter is Not a Store.” The rules were designed to ensure that project creators set realistic expectations with potential backers. Apparently some people see Kickstarter more as a way to get the next cool thing first than as a way to back projects they see as having merit. The trouble with that is there is risk associated with crowdfunding that one wouldn’t normally encounter with a “traditional” ecommerce transaction (as if there’s anything traditional about ecommerce, right?)
The first rule change is that project creators must now answer the question, “What are the risks and challenges this project faces, and what qualifies you to overcome them?” A legitimate question for certain, and one that any other type of investor would probably ask as part of their due diligence. To be fair, most project creators were already making that obvious – it’s just gone from being a best-practice to becoming a rule.
From there it gets a bit more restrictive. Projects posted in the Hardware and Product Design category must now follow these additional rules:
- Product simulations are now prohibited. Products can only be shown as they are able to perform today – not how they might work in a future state of development.
- Product renderings are also prohibited. Product images must be of the prototypes as they currently exist.
- Projects are prohibited from offering multiple quantities of a product as a reward for a larger investment