Kickstarter

Definition

Kickstarter is a crowdfunding platform that allows individuals and organizations to present their creative projects and raise funds from the public. By offering rewards or incentives to backers, project creators can gather the necessary financial support to bring their ideas to life. This model of funding is particularly popular among artists, filmmakers, and entrepreneurs seeking to launch innovative projects without relying solely on traditional funding sources.

5 Must Know Facts For Your Next Test

1. Kickstarter was launched in 2009 and has since facilitated the funding of over 200,000 projects across various creative fields.
2. Projects on Kickstarter must reach their funding goal within a set time frame; if they do not, no funds are collected from backers.
3. Kickstarter takes a 5% fee from the total funds raised by successful projects, which is crucial for maintaining the platform.
4. The platform is particularly beneficial for filmmakers, musicians, and game developers who need financial support to cover production costs.
5. Kickstarter operates under an all-or-nothing funding model, encouraging project creators to set realistic funding goals and engage potential backers effectively.

Review Questions

• How does Kickstarter differentiate itself from other crowdfunding platforms in terms of project funding and backer engagement?
  • Kickstarter differentiates itself through its all-or-nothing funding model, where projects must reach their stated funding goals within a specific timeframe. This approach encourages project creators to carefully plan their campaigns and actively engage potential backers by offering attractive rewards. Additionally, Kickstarter focuses on creative projects, fostering a community that supports innovation and artistic endeavors, which enhances backer engagement compared to more general crowdfunding platforms.
• Discuss the implications of Kickstarter's reward-based funding model for project creators and backers.
  • The reward-based funding model on Kickstarter creates unique implications for both project creators and backers. For creators, it allows them to gauge interest in their project before fully committing resources, while also motivating them to develop compelling rewards that attract support. For backers, this model provides a sense of involvement and connection to the projects they support, as they receive tangible rewards or experiences in return for their financial contributions. However, it also places pressure on creators to deliver on promises, as failing to fulfill rewards can lead to dissatisfaction and distrust.
• Evaluate how the success of Kickstarter has influenced traditional funding methods in the creative industries.
  • The success of Kickstarter has significantly influenced traditional funding methods by demonstrating that grassroots support can effectively finance creative projects. It has encouraged artists and entrepreneurs to bypass conventional avenues like grants or loans and instead connect directly with their audience for financial backing. This shift has led to increased democratization in funding, allowing more diverse voices and ideas to emerge in the creative industries. As a result, traditional funders are also adapting by considering crowdfunding success as a metric for potential investment, further blending these two approaches.

Related terms

Crowdfunding: The practice of raising small amounts of money from a large number of people, typically via the internet, to fund a new venture or project.

Backer: An individual who supports a project on a crowdfunding platform by pledging money, often in exchange for rewards or incentives offered by the project creator.

Reward-based Funding: A type of crowdfunding where contributors receive non-financial rewards in exchange for their monetary support, such as products or experiences related to the funded project.