Kickstarter

Definition

Kickstarter is a popular crowdfunding platform that allows creators to raise funds for their projects through small contributions from a large number of people. It connects entrepreneurs, artists, and innovators with backers who are interested in supporting their ideas in exchange for rewards, such as early access to products or exclusive content. This model has revolutionized how projects are financed, making it easier for creators to launch their ventures without relying solely on traditional funding sources.

5 Must Know Facts For Your Next Test

1. Kickstarter was founded in 2009 and has since become one of the largest crowdfunding platforms in the world, facilitating millions of projects across various categories.
2. Projects on Kickstarter are typically funded through an 'all-or-nothing' model, meaning that if a project does not reach its funding goal, no money is collected from backers.
3. Successful Kickstarter campaigns often utilize marketing strategies like social media outreach and engaging storytelling to attract backers and build excitement around the project.
4. Kickstarter has been pivotal for many creative endeavors, including films, music albums, video games, and innovative products, helping creators gain visibility and support.
5. Kickstarter is based in the United States but has expanded its reach globally, allowing international projects to seek funding from a diverse array of backers.

Review Questions

• How does the 'all-or-nothing' funding model work on Kickstarter and why is it important for creators?
  • The 'all-or-nothing' funding model on Kickstarter requires that a project reaches its stated funding goal within a specific timeframe for the funds to be collected. If the goal is not met, no money is charged to backers. This model is crucial for creators because it minimizes risk; it ensures they only receive funds if they have enough support to successfully complete the project, thereby protecting both the creator's investment and the backers' contributions.
• Discuss the role of marketing in the success of Kickstarter campaigns and how creators can effectively engage potential backers.
  • Marketing plays a vital role in the success of Kickstarter campaigns as it helps creators reach potential backers and generate interest in their projects. Effective engagement strategies include using social media platforms to share updates and connect with audiences, creating compelling narratives about the project, and utilizing visuals such as videos and images to showcase ideas. Creators who actively promote their campaigns and foster a community around their projects often see higher levels of support and funding.
• Evaluate how Kickstarter has changed the landscape of funding for creative projects and the implications this has for traditional funding methods.
  • Kickstarter has significantly transformed the funding landscape for creative projects by providing an accessible platform for creators to connect directly with potential supporters. This shift has diminished reliance on traditional funding methods like banks or venture capitalists, which often have stringent requirements and may overlook innovative or niche ideas. As more creators turn to crowdfunding, it raises questions about sustainability and market validation, as success on platforms like Kickstarter can sometimes lead to oversaturation in certain markets, impacting long-term viability.

Related terms

Crowdfunding: The practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet.

Backer: An individual who supports a project on crowdfunding platforms like Kickstarter by pledging money in exchange for rewards.

Reward-based Funding: A crowdfunding model where backers receive tangible rewards or incentives based on the level of their financial contribution.