Crowdfunding is based on trust, and most of the time it works. The “Publishers Weekly: Crowdfunding Ethics and Evolution” panel at Comic-Con International in San Diego, moderated by Publishers Weekly editor Calvin Reid, was on hand to talk about what happens when it doesn’t work.
“Failure is a good teacher,” said attorney Jeff Trexler. According to Trexler, when a Kickstarter fails, it’s often due to inexperience: “A lot of times, people’s grasp exceeds their reach,” he said. “Another problem is they can’t take something to scale. They can create a project or get a service somewhere along the line, but they can’t meet the demand for it and it becomes unprofitable or even impossible for them to fulfill.”
Trexler cited Universal FanCon, a convention funded on Kickstarter, as an example of what can go wrong. “It ended up falling apart over the hotel payment,” he said. “You have to pay for a certain number of rooms. Another rule: Read the contracts.”
Not to mention the platform’s fine print. “If you are going to do this, read the Kickstarter terms and conditions, particularly numbers 3 and 4 -- what not to do,” Trexler said. “They are a model of the form. They’re not written in legalese, they are written in plain language.”
Keeping accurate books is important especially when money is going to development: “If that money is accounted for, it doesn’t have to be refunded,” Trexler said. “The terms and conditions say to keep accounts, but they are not holding creators accountable for saving all the money and refunding all of it” if a project fails. On the other hand, creators should be careful about marketing claims -- that’s what can trigger state consumer protection laws.
Kel McDonald, who has run 14 Kickstarters, all of them successful, had more advice: Budget for emergencies. She typically sets aside $2,000 of her goal for contingencies, which came in handy at least once, when copies of a book got lost in the mail and had to be replaced.
When a project runs into problems, she said, the best thing is to let people know as soon as possible. In one instance, she hurt her hand and could not complete a comic by the promised date. “Because I told them, I only had one of my backers complain,” she said.
Shipping out physical rewards is the hardest part of running a Kickstarter, McDonald said, so she experimented recently with a campaign that had all digital rewards. “The trade-off was fulfillment was easier, but promotion was harder,” she said. “People want a physical object.” While an all-digital Kickstarter is doable, she said, the goal should be smaller than one with physical rewards.
There was some talk of successes, too. Josh O’Neil of Beehive Press (and previously, Locust Moon Press), referred to his work as “quixotic publishing”: “Strange formats, oversize books, newspapers, but also artists with really fascinating, unique, visionary approaches, marginalized voices -- things that traditional publishing says don’t work are often the things that work best with crowdfunding,” he said. “You see these projects explode because there is a pre-existing audience that was not being served.”
“Comics is a really robust category on Kickstarter,” said Camilla Zhang, who recently joined the company as their comics outreach lead. “It’s a community that is really engaged with the creators that they support, so we have a lot of repeat backers.” Comics creators have raised $75 million since Kickstarter launched in 2009, she said, and she sees the category growing even more.
Part of her job is to help creators make that happen, whether their projects are large or small. “There are zine makers who say ‘I can’t,’” she said, “but set a low goal of $500 and you can get your zines published, you can bring them to shows, you are connecting with your audience online and in-person, so you are supporting your own craft that way.”
McDonald was the third comics creator to use Kickstarter, and she did it to take the risk out of her business. “I knew I had an audience for my webcomic, but I didn’t know if they were interested in buying the book or just wanted the option to be available,” she said. “In the past, people would say ‘Cool T-shirt!’ and then people wouldn’t buy it. So Kickstarter was a way to say “You want to buy a book? Here’s a way to make that happen.’ Nine years later, I’ve done 14 Kickstarters.”