Kickstarter

Definition

Kickstarter is a crowdfunding platform that allows individuals and organizations to present their creative projects and seek financial support from the public. It connects creators with backers who can contribute money in exchange for rewards, early access to products, or exclusive content, facilitating the launch of innovative ideas that might not have traditional funding sources.

5 Must Know Facts For Your Next Test

1. Kickstarter was launched in 2009 and has since funded over 200,000 projects across various categories, including art, technology, and design.
2. The platform operates on an all-or-nothing funding model, meaning that if a project does not reach its funding goal by the deadline, no money is collected from backers.
3. Projects on Kickstarter typically have a set funding goal and deadline, which helps create urgency and encourages potential backers to support projects they find interesting.
4. Kickstarter has fostered the creation of numerous successful products and businesses, including games like 'Exploding Kittens' and tech innovations like the Pebble smartwatch.
5. Creators must promote their campaigns effectively to attract backers, often using social media and networking to reach their target audience.

Review Questions

• How does Kickstarter facilitate the connection between creators and potential backers?
  • Kickstarter provides a platform where creators can showcase their projects through engaging videos, detailed descriptions, and defined funding goals. This visibility allows potential backers to assess the project's viability and decide if they want to support it. By offering various reward tiers, creators can incentivize backers to contribute at different levels, thereby increasing the chances of successfully reaching the funding goal.
• Evaluate the impact of Kickstarter's all-or-nothing funding model on project creators and backers.
  • Kickstarter's all-or-nothing model encourages creators to set realistic funding goals while motivating them to market their projects effectively. For backers, this model reduces the risk of investing in projects that may not deliver; they only pay if the project reaches its goal. This setup fosters a sense of trust between creators and backers but can also pressure creators to meet targets or risk losing their funding.
• Analyze how the success of Kickstarter-funded projects has influenced trends in entrepreneurship and innovation.
  • The success of projects funded through Kickstarter has inspired a new wave of entrepreneurs to pursue unconventional ideas without relying on traditional venture capital. This democratization of funding has led to increased innovation as creators feel empowered to explore niche markets and unique concepts. Additionally, successful campaigns often serve as case studies for other entrepreneurs, illustrating effective marketing strategies and community engagement methods that can be replicated across different industries.

Related terms

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

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

Reward-based funding: A type of crowdfunding where contributors receive non-financial rewards, such as products or experiences, rather than equity or financial returns.