Quoted from beelzeboob:
So yeah...I guess the preorder model is dead. And that sucks for all the other boutique manufacturers. This one epic mess may stall all the momentum pinball had been gathering with all the new companies stepping up.
Why does it have to suck that there wouldn't be crowd funding available for boutique startups?
This doesn't have to be the end of boutique startups. They just need to get back to how it's always been done.
New boutiques just need to get their staff together, and if they're truly THAT passionate about starting a manufacturing line to make their machine en masse, they will all go out and secure $50,000 loans (each), or second mortgages, or max their credit cards, and/or sink their retirement savings into their company. That's what groups of entrepreneurs do if they have a dream.
This whole thread has blown me away, and I just wanted to step in and say as a 10-year-AFTER-startup pinball company, that the recent "kickstarting" or "crowd funding" model the last couple years blows my mind. When CPR started, yes we had a dream, yes we had a plan of what we wanted to be able to do... but like any business dream, on the side or otherwise, you need to finance it to get it going. I cannot begin to tell you the extent that we went into hock to buy everything we needed. Loans, credit lines, credit cards, savings... ALL maxed and spent. With minimum payments due every month or course. Personally (and I'm being completely honest here) I nearly lost my house back in 2007. Yes. The timing of the completion of the BK playfield pairs was 6 months later than originally planned, and due to that bad timing, there was nothing we could pay ourselves with for a very long period of time. When it was just two of us, my partner had a full time job, he was OK. I had switched to CPR exclusively a year prior. So with a house 4 months in arrears, the bank started foreclosure proceedings. Plus monthly payments on *everything* were missing. Thanks to a good friend of mine, she opened a credit line in her name, and cut me a cheque to pay the bank and ward off the foreclosure. The house (with a basement full of BK's) was saved to live another month or two. We made it to the BK release. It took many years to pay all our original debt down. But we came out the other side. That's what you DO. IMHO. That's what it takes.
I think it's obvious the difference when a company is liable to it's own financing. In your mind, put yourself in the place of both models, and feel the difference. I can certainly tell you that when it's YOUR money you've risked, and interest is ticking on you, there is a HUGE candle under your butt to perform & produce. You have to. You don't have a choice.
The existence of interest free, unreporting (credit bureau), and no-monthly-payment loans handed over so nonchallantly to seed major projects of this scale... boggle me. I wouldn't have been able to sleep at night if we had ever financed like that. Risking/holding/spending customers' money. Plus what I read (amongst many) a cavalier attitude toward no-recovery loss. Things like "It's my risk, meh. If I lose it, I lose it" W-O-W So being funded this way also means that if you end up not reaching the finish line, your seeders aren't even going to come calling? They "knew the risk", and just casually blow it off? What a utopian financing. No-strings-attached financing? That's why I can't believe it's become so prevalent, and so accepted. Maybe the cavalier attitude toward loss is just a brave face. I would think $5000+ if ever truly lost, to anybody, would be a big deal. Methinks.
All I can say is, we never had even an inkling of such a concept/meme in the hobby back in 2004-2005 when we started. Times have changed !
My 2 cents from a personal perspective...