The Dark Underbelly of Crowdfunding

Davidgaames has an excellent guest post “When Good Kickstarters Go Bad” over at Caffeineforge about two Kickstarter projects that had questionable jumps in funding at the end of their project runs: Lodus and Conclave.

Lodus seems to be the most egregious. As you can see from the graph over at Kicktraq, they peaked early in the project and didn’t have much hope:

But, wait, what’s that? It’s a bird, it’s a plane, it’s the FINAL DAY OF THE PROJECT:

Holy sock backers, Batman! That’s a $28,000 jump in the last day!

 

And as David notes, the backers themselves look a little fishy. The largest any one donor can contribute on Kickstarter is $10,000, and it would have looked really bad had three people suddenly dumped that level of cash into the project. Instead, there are over one hundred other accounts – accounts that joined Kickstarter in August 2012, the month the project finished, and had never backed projects before – that came on to help carry the load in the closing hours.

Basically it looks the company took a gamble and ponied up the rest of the cash to ensure that they didn’t lose the $20,000 they had already raised. Seems to defeat the whole purpose of crowdfunding, don’t it?

Very impressive analysis, gentlemen. According to David Winchester from Caffeinforge, the post is already getting hits and being spread around Twitter. I’ll be VERY curious to see what the already surprised backers think if someone posts it on the comments page at Kickstarter.

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