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Why sponsor a sealed post

Sponsors put up the backers’ bonus on a sealed post they want opened. If it unseals, their hold is released and they pay nothing; if it stays sealed, their money pays the backers who showed up.

Money · 8 min read · · updated

A crowdfunded sealed post has three seats, and two of them explain themselves. Creators put work behind a goal. Backers pool money to open it. Then there are sponsors, who put real money behind other people’s pledges on a post they want opened, and are never paid for it.

That is the strangest seat at the table, and the whole mechanism rests on it. So it is worth sitting in for a few minutes.

What does a sponsor actually do?

Take the post from the worked example: a $100 goal, sealed for three days. Two people who follow the creator want it opened, and they sponsor it early, while the ending is still wide open. One puts up $15, the other $10.

Neither of them is buying the post. Sponsoring does not unseal anything, does not reserve anything, and does not come with a copy. It does one thing: it puts a bonus behind every backer. The offer it makes to everyone else is simple: back this post, and if it misses, we pay you for having shown up.

If the post opens, the sponsors’ holds are released and nothing is charged. They are credited nothing either, and that is the design rather than an oversight: they wanted the post opened, and now it is, for them and for everyone else. If it stays sealed with backers in it, the sponsors’ money pays those backers their bonuses.

openmog’s fee is 10% of each payment with a 75 cent minimum, card processing included, and it sits inside the price the payer sees. Set $30 and the buyer pays $33.34; you receive $30.00. The price you set is the price you receive. Which side carries it follows the outcome: the backers’ charges when the post opens, the sponsors’ when it stays sealed.

Why would anyone sponsor a post?

Because they want it opened, and backing alone moves the meter by one pledge. Sponsoring moves everyone else’s. A backer looking at a bare $100 goal has to guess whether anyone else will show up, and the sensible guess is to wait and see. A backer looking at a sponsored $100 goal is being told that if it misses, they will be credited a share of the pool on top of never having been charged. That removes the reason to wait, and a post nobody waits on is a post that funds.

It is the fix a 1998 economics paper proposed for exactly this problem, with one change in who pays for it. The mechanism post has the history. What matters from this seat is that the person putting up the bonus can be anyone who wants the post to exist in the open.

What does a sponsor pay when a post opens?

Nothing. When the post funds, every sponsor hold is released without a charge, the backers are charged the all-in price of their stakes, and the creator receives the whole goal. A sponsor is credited nothing either: a sponsorship pays nothing back, in any ending. The reward is the post itself, public for everyone, sponsors included.

This is the ending sponsoring is for. A post people cared enough to sponsor is a post more likely to fund, and when it does, the sponsorship cost exactly nothing.

What does a sponsor pay when a post stays sealed?

Their share of what the backers are owed, plus the fee on that payment, and never more than their hold. Say the post ends with $60 backed by three people, at $30, $20 and $10. The pool is $25, smaller than the backing, so the whole pool goes to the backers by the size of their pledges: $12.50, $8.33 and $4.17. Each sponsor is charged their share of that $25.00 by the size of their sponsorship, plus openmog’s fee on that payment: $16.67 for the $15 sponsor and $11.12 for the $10 sponsor, $27.79 in all, the bonuses plus $2.79 of fee. The fee riding the sponsors’ charges is what lets the backers receive their bonuses whole.

Had the pool been larger than the backing, say $100 against that same $60, each backer would have been credited 100% of their pledge, the cap, and the sponsors would have been charged only that $60 plus the fee, with the rest of every hold released. Your sponsorship caps your exposure rather than being a payment you already made, and the cap is real: the charge can never grow past the hold you placed.

A near miss is still a miss, though, and that is deliberate. A post that reaches 92% of its goal at the deadline has stayed sealed, and the backers who turned up are owed their bonuses in full. A promise that softened at the edges would be worth much less to the backers it was made to.

One ending returns everything. If a post ends with no backing at all, nobody is owed a bonus, so every hold is released untouched and nobody pays.

When is sponsoring a good idea?

When you want the post opened and you know its audience. If you have followed a creator for two years and watched their replies fill up with people asking for exactly this, the audience is there and only needs a reason to move first. Sponsoring is how you give them one.

That is easy to underrate. The pool does not sit off to the side of the post; it changes how the post behaves. A backer looking at a sponsored goal is looking at people who wanted this enough to stand behind everyone else’s money with their own. And because that pool becomes the bonus if the post falls short, every dollar placed into it makes backing a better deal at the exact moment it makes funding likelier. Put up only what you can spare, though: if the post stays sealed with backers in it, up to your whole hold can be charged to pay them.

When can you sponsor?

Any time while the post is live, and anyone can: a sponsorship placed on day one and one placed an hour before the deadline are treated the same. Two things close on their own. The pool stops growing once it matches the goal, because a post that stays sealed raised less than its goal and no backer can be owed more than their own pledge. And sponsoring closes the instant a post unseals, because the ending is settled and no bonus can be owed.

There is nothing to gain by waiting: a sponsor collects nothing in any ending. If the pool is already full and you still want the post opened, back it. Backing is what actually moves a post toward its goal, and it is the one seat that comes out fine either way.

Can the artist sponsor or back their own post?

Both, on the same rules as everyone else. An artist sponsoring their own post is saying: fund this, or I will personally pay you for having shown up. It is also a small piece of history. In the 1998 design that sealed posts are built on, the person proposing the project put up the bonus themselves, so a self-sponsored post brings the idea all the way back around.

An artist can also back their own post, and if it stays sealed, that pledge is credited its bonus like any other backer’s. Every seat runs on one set of rules, whoever sits in it. A creator setting a post up for the first time should start with your first sealed post.

That is why the seat exists. Creators bring the work, backers bring the goal, and sponsors bring the reason to back now. Next: pay to reveal, the mode with no crowd in it; the FAQ for the money questions in one place; or go find a post you want opened.

Frequently asked questions

What is a sponsor on openmog?
A sponsor is someone who puts up the bonus a crowdfunded sealed post pays its backers if it stays sealed. Sponsoring does not unlock anything and comes with no copy of what is inside. If the post unseals, the sponsor’s hold is released and nothing is charged. If it stays sealed and someone backed it, the sponsor is charged their share of the backers’ bonuses, by the size of their sponsorship, plus openmog’s fee on that payment, and the rest of the hold is released.
Are sponsors paid anything?
Never. When the post opens, a sponsor’s hold simply releases and nothing is credited; when it stays sealed after someone backed it, a sponsor’s money goes to the backers. What a sponsor gets is what they wanted: a post more likely to open, because what they put up raises what its backers are paid if it misses, up to 100% of each pledge, and once it opens it is public for everyone, sponsors included.
What does a sponsor pay if the post stays sealed?
Their share of what the backers are owed, plus openmog’s fee on that payment, and never more than their hold. With $25 sponsored as $15 and $10 against $60 of backing, the pool is the limit: the cards are charged $16.67 and $11.12, $27.79 in all, the $25.00 of bonuses plus $2.79 of fee. Against a pool larger than the backing, the sponsors are charged only the total backed plus the fee, and the rest of every hold is released. A post nobody backed owes no bonus, so every sponsor hold is released untouched.
When can I sponsor a post?
Any time while it is live, whoever you are, the artist included. The pool stops growing once it matches the goal, and sponsoring closes the moment the post funds. There is nothing to gain by waiting: a sponsor collects nothing in any ending, so the only thing timing changes is how long the backers can see your bonus before they decide.
Can the artist sponsor or back their own post?
Both, on the same rules as everyone else. An artist who sponsors their own post has rebuilt the original 1998 dominant assurance contract, in which the person running the project puts up the bonus themselves. An artist can also back their own post, and if it stays sealed that pledge is credited its bonus like any other backer’s. The rules do not change with who is sitting in the seat.