Kickstarter

Definition

Kickstarter is a crowdfunding platform that enables creators to raise funds for their projects by receiving small contributions from a large number of people. This model is particularly effective for entrepreneurs, artists, and non-profit organizations seeking financial support to launch creative endeavors or innovative products. Kickstarter not only helps in funding but also fosters a community around ideas, allowing backers to engage with creators throughout the project's lifecycle.

5 Must Know Facts For Your Next Test

1. Kickstarter was launched in 2009 and has since facilitated the funding of hundreds of thousands of projects across various categories, including art, technology, and games.
2. Projects on Kickstarter operate on an all-or-nothing funding model, meaning that if a project doesn't meet its funding goal by the deadline, no funds are collected.
3. Creators can offer different reward tiers to backers, incentivizing higher contributions with exclusive items or experiences related to the project.
4. Kickstarter has a strong community aspect, where backers often receive updates on project progress and can interact with creators through comments and messages.
5. The platform has helped launch several successful companies and products, including the Pebble smartwatch and Exploding Kittens card game, demonstrating its impact on entrepreneurship.

Review Questions

• How does Kickstarter's all-or-nothing funding model influence the behavior of project creators and backers?
  • Kickstarter's all-or-nothing funding model encourages creators to set realistic funding goals that they are confident can be met within the project timeline. This fosters accountability as they must engage potential backers effectively to reach their goal. For backers, this model reduces risk because they only pay if the project is successfully funded, ensuring that their contributions go toward viable projects.
• Discuss the significance of reward tiers in Kickstarter campaigns and how they affect backer engagement.
  • Reward tiers play a crucial role in Kickstarter campaigns as they provide backers with tangible incentives for their contributions. By offering various levels of rewards based on contribution amounts, creators can attract a wider range of backers. This not only enhances engagement but also builds a sense of community as backers feel connected to the project's success through their rewards.
• Evaluate the impact of Kickstarter on traditional funding methods for creative projects and entrepreneurial ventures.
  • Kickstarter has significantly disrupted traditional funding methods by providing an alternative platform for creators and entrepreneurs to secure financial support without relying on banks or investors. This democratization of funding allows individuals with innovative ideas to reach potential supporters directly and gain visibility without traditional gatekeepers. As a result, Kickstarter has fostered greater diversity in creative projects and has empowered many small-scale entrepreneurs who might otherwise struggle to access capital.

Related terms

Crowdfunding: A method of raising money from a large number of people, typically via the internet, to support a project or venture.

Backer: An individual who contributes funds to a project on crowdfunding platforms like Kickstarter in exchange for rewards or future products.

Funding Goal: The monetary target that a project creator sets on Kickstarter that must be reached for the project to be funded.