You have to be smart and aware of the risks (and actually accept those risks instead of acknowledge them but think 'but it will never happen') and I imagine everyone has their own set of conditions for how you do that. For me:
1. Never back large amounts of money. - I'm not really comfortable with the idea of it, Kickstarters shouldn't be a charity because there are a lot of real charities out there that could use your money if you're not using it for your own gain. If I made a kickstarter I'd be pretrified that no matter how good the thing, it can't be worth $1000 to someone.
2. Only back to the level where you actually want all those rewards for that price. - For the same reasons as no. 1.
3. Only back things that you really want to exist. - If I thought that it was only going to be an average product, why am I taking the risk to kickstarter it? On the other hand, I really want Obsidian to make more RPGs and I want more story-focused games in general (Dreamfall).
4. The scale has to be feasible - Making games is _really_ hard. A small idea is way better than a grand idea because the grand idea might never happen. The difficult bit with a game is actually making it and working out the ideals, not making the pitch. You see this problem a lot with people saying 'This feature in my MMO sucks, Star Citizen is way better because they're going to do this instead.' Star Citizen hasn't been made yet, it does jack all better than current MMOs. When it's made maybe that idea will turn out to have worked, maybe it won't.
5. There has to be a reason why the developer can make this game - Past experience is the best one here. Obsidian have been making fantastic RPGs for years and haven't made one so far that's been completely uninteresting. Or they might have already completed a large section of the game (Windforge). Or the game might be entirely writing focused and you know the writer.
6. You have to be prepared that the game might not be made. - see no.1
7. You have to be prepared that the game might be made and be completely average. - This is actually worse than no. 6 in some ways. I think everyone believes that if a kickstarter completes it's going to be fantastic, but it's much more likely that it's going to be the sort of game that gets 7 out of 10s. If the game has a hook that makes it interesting even when it's horribly flawed (Unrest) then that's good.
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So far I've backed
*2 print editions of Unsounded - a webcomic I want to own
*The final season of Loading Ready Run - which has been completely worthwhile. I've already watched them for years, backing them one more year was no risk and their content is worth money to me.
*The end of the season of Doraleus and Associates - This one felt like it wasn't going to get completed, but it did and it was brilliant.
*Pillars of Eternity - I've loved every Obsidian game I've ever played. I'm confident I will love it even when it's buggy and incomplete, just like I loved KotoR 2
*Wasteland 2 - I only backed this one when Chris Avellone came onboard to write it. The guy is a fantastic writer. By other people's accounts this game is turning out much better than it should.
*Tides of Numeria Torment - Chris Avellone and George Ziets
*Unrest - small project, fantastic concept, written by a guy whoo I've been following for a while. I want more games based in other cultures.
*Dreamfall Chapters - This was actually I really stupid one for me to back, because I'd never even played Dreamfall. But I wanted more story focused PC games and went for it. Luckily I have since played Dreamfall and it's one of my favourite games now. I can't wait for this one.
*Windforge - Already practically completed, the developer just needed to get across the last hurdle. When it came out, my PC couldn't handle it and it was buggy.
*Bloom, Dyscourse, The Long Dark, The Mandate - To be honest I regret backing these, although there's no reason to think they'll be bad games yet. I was in a bad state of mind and my willpower was low. They've all got great concepts, but I have no reason to believe the developers have the ability to pull off what they're promising. (I have no reason not to believe it either, but that's not good enough). Of all of them, I love the Mandate's design aesthetic and even though it's promising way too much to pull it all off, I'll be happy to have a game with that kind of theme.
All of these I backed at the level basically enough to get the product I wanted.