Kickstarter crowdfunding platform: are you creative enough to access free financing?

3 May 2017

In the current fintech environment with plethora of opportunities for young projects and startups to launch their own business it is no longer a big deal to find a required financing, even if some developer is looking for interest-free funding similar to charitable donations. Kickstarter has been there for creative startups for over 8 years so far, helping them collect money to put their bold ideas into practice, bringing innovative products to the market. So how do we kick start working with this well-established public-benefit company?

Brief intro

What is Kickstarter? It is a proven crowdfunding platform based in Brooklyn, New York, that was incepted on April 28, 2008, a sizeable term for a company in a relatively young fintech industry after all. Times assigned to Kickstarter such titles as “Best Inventions of 2010” and “Best Websites of 2011”.

Kickstarter is focused on creative projects, providing funding assistance to filmmakers, artists, camera directors, musicians, designers, performers, people involved into the scientific research and many other innovative idea owners. According to the statement of Kickstarter, the company has so far received about $2 billion in pledges made by over 9 million supporters to finance 257,000 creative projects.

Brief intro

How do you get up and running?

Insomuch as Kickstarter is all about unique and innovative ideas, you need, definitely, to have the one. Well, if you don’t you may initially just join the community on the platform seeking for some advice, recommendations and making ‘market research’ analyzing the products or concepts proposed and based on your findings ‘generate’ your own draft project. In the course of communication with other people on the website, you get their feedback on your idea and decide whether you will launch your fund raising campaign or not.

When after all you do launch your campaign, you need to clearly state what your product or service will look like, what are its key benefits for the audience and what you are actually doing to achieve your business goals. Besides, you should offer some first samples of your potential merchandise for a price lower than that of established and long operating companies providing something similar, otherwise investors won’t be too much interested in your proposal that may cost them the same money for already existent product on the store shelves.

Kickstarter reviews your projects prior to ‘kick start’ them

While general idea seems very simple and unsophisticated, don’t jump to tread on air, it’s not all that magnificent, though, you should not expect to roll a huge stone like Sisyphus or experience torments of Tantalus to start your campaign after all, there is no such thing. But Kickstarter team explicitly clarifies that before you begin they will review your project for its compliance with their criteria.

The first thing to bear in mind is 15 categories of the projects acceptable for Kickstarter, which include:

– art

– comics

– crafts

– dance

– design

– fashion

– film and video

– food

– games

– journalism

– music

– photography

– publishing

– technology

– theater

The second thing is meeting the requirements as provided in the rules of Kickstarter.

Kickstarter alleges that they usually review most projects within 30 hours, but if they see it fit to apply modifications or amendments to the project, the process will take longer time. That is why Kickstarter recommends to make allowance for about 2-3 days. Kickstarter claims to accept 80% of the filed projects as a matter of fact.

Kickstarter

When you’re onboard

Okay, you pass review process of Kickstarter and get your approval to launch your fund collection campaign. The process involves clear statement of the specific amount you need to raise for your project and a deadline for donations. The key point here is that Kickstarter charges 5% funding fee, but it is not you who bears the costs, it is your sponsors.

If you fail to collect the required amount of money by the date you specify as your deadline, all funds are returned back to the backers, and you won’t be charged any penalty. And, on the contrary, if you do successfully raise the whole claimed amount, Kickstarter transfer the funds to your account with the 3% to 5% fee taken for processing the transaction by Stripe, as Kickstarter is working with this payments provider.

At is bottom Kickstarter is somewhat burdensome for backers, which appears to many of them as unfair, because for their voluntary deed of supporting innovative projects virtually without any financial interest they have to pay the fee to Kickstarter and to Stripe, that may cost a pretty penny. That causes negative feedback and abandonment of such financing initiative by investors. But look, Kickstarter is still there remaining live and helping a great deal of startups to finalize their ideas and collect a capital for their business.

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