Nobody in their right mind would ever give a money finder a flat “finder’s fee” when the finder is raising large amounts of money (see “Lehman Formula“). After the religious experience of the Amanda Palmer Kickstarter project, followed by Veronica Mars and Zach King, it occurs to me that Kickstarter is making too much money on these deals. (This assumes, of course, that experienced Hollywood types just hand over Kickstarter’s 5% vig without question–which is itself a question, but one I cannot answer yet.)
When these stars–yes, the hated star system–come to Kickstarter, they could literally go to any of several sites to raise their money. Or do it themselves as Lewis CK demonstrated. The fact that it’s Kickstarter is of no significance at all. Kickstarter’s 5% would mean it made $285,000 and counting off of Veronica Mars for doing essentially the same amount of work as they would do to make a documentary about Veronica’s dog. (Because as we all know, on the Internet, their marginal cost would be zero, right?)
This isn’t to say that Kickstarter doesn’t provide a valuable service, but it is to say that the reason that Kickstarter made bank on these deals has nothing to do with Kickstarter, and everything to do with the brand value of the project that pre-existed the fund raising.
So Kickstarter should start taking less the more that’s raised like anybody else. The normal Wall Street finder’s deal starts at 5% and goes down 1% in million dollar increments to a 1% floor. Given that the vast majority of the projects on Kickstarter raise less than $100,000 and only 28 have raised more than $1 million, it seems that the reduction in commission should start earlier to be democratic so it’s not only the 1% who would get the finder fee reduction.
I don’t know what the right formula is, but what I know is that it is absurd for Kickstarter to be taking 5% of multi-million dollar projects to which they add no value.