Intro to Real Estate Finance

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Kickstarter

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Intro to Real Estate Finance

Definition

Kickstarter is a crowdfunding platform that allows creators to fund their projects through small contributions from a large number of people. It connects entrepreneurs, artists, and inventors with potential backers who are interested in supporting innovative ideas, often in exchange for rewards or early access to products. The model emphasizes community involvement and democratizes the funding process, enabling creative projects that might not attract traditional financing.

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5 Must Know Facts For Your Next Test

  1. Kickstarter was launched in 2009 and has since funded thousands of creative projects across various categories, including art, technology, and music.
  2. The platform operates on an all-or-nothing funding model, meaning a project must meet its funding goal within a set timeframe to receive any money pledged.
  3. Kickstarter has helped launch notable products like the Pebble smartwatch and the Exploding Kittens card game, showcasing the potential of crowdfunding.
  4. Creators on Kickstarter often engage their audience through updates and interactions, fostering a community around their project.
  5. Kickstarter has strict guidelines and policies in place to ensure transparency and accountability in the projects listed on its platform.

Review Questions

  • How does Kickstarter's all-or-nothing funding model impact project creators and backers?
    • Kickstarter's all-or-nothing funding model requires project creators to set a specific funding goal within a limited timeframe. If they do not reach this goal, they receive no funds. This model encourages creators to effectively market their projects to gain sufficient backer support while minimizing risk for backers, as they are only charged if the project is successfully funded. It creates a sense of urgency and community among potential backers who want to see the project succeed.
  • Discuss the implications of using Kickstarter for funding creative projects compared to traditional financing methods.
    • Using Kickstarter for funding creative projects offers several advantages over traditional financing methods, such as access to immediate funds without needing to provide equity or pay interest. It allows creators to gauge public interest before fully committing resources to their projects. However, it also puts pressure on creators to deliver promised rewards on time while maintaining transparency with backers. Unlike traditional investors who may focus on financial returns, Kickstarter backers are often more interested in supporting creativity and innovation.
  • Evaluate the impact of successful Kickstarter campaigns on the broader landscape of entrepreneurship and innovation.
    • Successful Kickstarter campaigns have significantly influenced the landscape of entrepreneurship and innovation by empowering creators from diverse backgrounds to bring their ideas to life without relying solely on traditional financing. This democratization of funding has led to a surge in unique products and creative endeavors that might not have found support through conventional routes. Moreover, it has encouraged other platforms to adopt similar models, further enriching the entrepreneurial ecosystem. As a result, Kickstarter has become a vital part of how new ideas are financed and launched in today's market.
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