How Does Kickstarter Work?

Do you have a project in mind? Have an invention you want to make real? An album you want to release? A play you want to put on? How do you plan to pay for it? There are, of course, options. You can take out loans, find an investor, or you can crowd-fund it. What's that you say? Crowd funding is a method for raising money little-by-little by lots of people, usually over the internet. The most well known way of crowd funding projects nowadays is through a website called Kickstarter.

Kickstarter is a website focused on helping people with creative projects raise money. Kickstarter focuses on the following themes: Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, and Theater. They define a project as having  "a clear goal, like making an album, a book, or a work of art. A project will eventually be completed, and something will be produced by it." This means it does not include things like charity or begging (aka "fund my life").

Kickstarter is best known for its unique way of fundraising. It uses an "all or nothing"method. The project owners set a goal (say, $500,000) and the supporters are only charged their pledged amount if the goal is hit. That means that if you pledge $25, but the project only raises $498,735, you do not loose your $25. The second thing Kickstarter is best known for is the multiple levels of pledging often set up by the project owners. It's not uncommon for pledge amounts to range between $1 and several hundred. Depending on the amount you pledge, you will receive gifts between a simple thank you to several copies of whatever you are funding.

Practical Tip of the Day:
If you do fund a Kickstarter project, be patient! People starting the campaigns are creative people, not operations experts. With projects that far exceed the original goal especially, it can sometimes take longer than anticipated to rework the plans for how to produce so many items, how to ship them, work out legalities, taxes, etc. Remember, backing a Kickstarter project is not like buying an item on Amazon. You're backing an entrepreneur to help them make their dream. These things can take time.