Fundraising After Failure

Be Honest — it’s awesome to be honest at the outset. Try to be really good in this area. Work hard on your estimates because they do matter. Missing deadlines for creative work is understandable but certainly not ideal. Whatever you think your most conservative estimates are, I’d increase those by 10–20%. If you find out you were wrong about your estimates at any point in the development process, tell someone quickly. There’s almost no harm in saying “gee this is going to be tougher and more expensive than we expected.” There’s a large amount of harm in keeping that to yourself until it’s too late to do anything.

Be Good — the worst thing you can do is knowing your public estimates are wrong and moving forward anyway. That’s unethical. That’s very, very unethical. Even if your goal is to raise a little and then privately raise the rest, you have to say that. You can’t just send out a blast and say “we always knew it would be more expensive than this but…..uh……MAGIC!??” This is especially true if you want to have relationships with private investors to keep your project going. Unethical investors exist, but believe me they’ll end up being a huge pain for you even if you are strange bedfellows.

Be Smart — okay so you raised the money you needed and then spent it all. You need to tell your backers and the press. This is the time when you need to learn the difference between being guilty and feeling guilty. If you deceive your backers into giving you money and now wish they would give you more, you are guilty. If you worked hard and couldn’t deliver the product on time, you feel guilty. If you’re in the second camp, shove 90% of that guilt aside and say “it’s time to raise more money and go to work.” Just be smart.

Be Private — once you’ve informed (at least) your backers and (maybe) the press about missing your marks and needing more money, go stealth and raise private funds. A lot of people were mad that Double Fine went out to raise private funds to finish Broken Age, but they were 100% right to do it. It was the way to get the cash to finish the game without burdening their fans. How to do this is an entirely different article, but suffice it to say if you have a successful crowdfunding story, you have that strength to take to angel investors who can complete that circuit for you.