While many of the crowdfunding and Peer to Peer lenders focus on equity investments in companies or real estate investments, there are some that would say they have a higher calling. These particular crowdfunding outfits focus their efforts on helping members to obtain funding for noble endeavors like creative projects. Kickstarter is the name brand of these crowdfunding platforms, that has become synonymous with crowdfunding due to its impressive, size, reputation, and reach. Projects listed on Kickstarter help writers, filmmakers, artists, designers, musicians, illustrators, curators, explorers, performers, promoters, and still others to take their creative projects from the drawing board state to living, breathing finished works.
Kickstarter Intro & Background
The Kickstarter platform and company has been so very successful because they utilize a rigorous screening program that is at once a computer-based algorithm and a personally monitored system in order to maintain the highest level of quality in their projects that they allow to be listed. In the end, this policy has possibly alienated a few users whose projects were turned down from listing, but it has also enabled Kickstarter to evolve into the unquestioned leader in the realm of artistic and technology projects.
As for how successful Kickstarter has been already, they have managed to bring onboard more than 10 million funders, which they call backers, from around the world to pledge to projects that have assisted in launching over 97,500 new ideas. Over $2 billion has so far been pledged to the various projects in the form of more than 27 million pledges in total. Their funding backers have often returned to help other projects and creators out, as more than 3, 100,000 have been repeat backers. This is an impressive track record considering that funding backers are not giving of their money with the hope of gaining financial returns. Rather they are doing this for the love of art and ideas and to gain such benefits as products like CDs, books, or videos; to have fun experiences like being recognized in a movie or video credits; or to enjoy calls from artists or writers who thank them for their help and share about their experiences with them. Kickstarter is adamant in their claims that there are no financial rewards nor any monetary returns, loans, or equity stakes involved with this platform.
Kickstarter Founder and Management Team
Co-Founder & CEO Yancey Strickler has served in a variety of capacities with Kickstarter. He has been both Head of Communications and Head of Community before taking on the role of CEO. Before he helped to found Kickstarter, Yancey worked as a music journalist and had works published in New York magazine, The Village Voice, Pitchfork, and other creative publications.
Co-founder and Chairman Perry Chen originally served as CEO of Kickstarter. At the beginning of 2014, he stepped down from this post to become Chairman of Kickstarter instead.
Co-founder and Head of Design Charles Adler has experience at co-founding companies before Kickstarter. He worked to co-found Subsystence the online art publication and also independently owned and run interaction design studio Source-ID. As such, Charles claims 12 years of experience working professionally with the interaction design industry, where he has focused on interaction design, experience strategy, information architecture, creative direction, and development.
At this time, Kickstarter does not make loans. Funding backers are making investments in creative projects in exchange for rewards and experiences.
How Kickstarter Works
As the biggest crowdfunding and also funding platform for creative projects in the world, Kickstarter has literally tens of thousands of individuals who pledge millions to projects ranging from film, music, technology, art, games, design, food, fashion, publishing, and other artistic and creative endeavors every week. Artists and creators enjoy complete control over all of their work and keep 100% ownership in it with this platform.
Getting started as a creator is not as simple as you might assume. Registering and completing all project information is the easy part. Becoming approved to be listed on the platform requires that your project and presentation both be focused, on task, and appealing in order to be included. The truth is that a great number of ideas are never accepted once reviewed because the organization and presentation is lacking, even when the concept is a good one. Kickstarter typically will not allow a second hearing, so all submissions should be well-defined, ideally explained, and clearly focused. After a two day waiting period typically, the approved project is informed that it must have its funding goal and time frame set so that it can then be listed on Kickstarter.
The platform operates on the basis of all-or-nothing with regards to funding. This is because any project that is unable to reach full funding will likely never be completed. Funding backers who pledge money will only have their credit cards charged if and when the full goal is met, and Kickstarter will only deliver funds to the creators when such a goal is actually completely fulfilled. Reaching the total goal is not easy, requires work and promotion, and involves giving out some inspiring rewards such as copies of an album or DVD, thanks in a published work, a visit to a movie set, a mention in any credits, or even a call from the creator or author.
While Kickstarter is quick to tout its great success as an organization in helping over 97,000 to reach their goals and receive the funds, they do not trumpet the fact that they have over 272,000 projects which were launched, meaning around 175,000 did not obtain any funding after listing with the platform for not reaching their goals. In other words, only 36% who managed to obtain listing of their project on the platform so far have been successful in obtaining any funding whatsoever with Kickstarter. A slightly better than one in three success rate is not great odds.
Kickstarter does not manage any aspects of promotion on behalf of the individuals who are successful in obtaining a listing of their creative or technological project. Unless your project is chosen to be run as a model project on their lead home page, you will have to put together an aggressive an intelligent campaign to have a good chance of reaching your ultimate funding goal and getting any funding from the platform’s funding backers. They do provide some services to both creators and funding backers.
- Helps to Sharpen Your Presentation – Since you must have a well-focused and -created presentation of your project in order to obtain listing in the first place, the platform forces you to put together a sound creative project plan.
- Delivers Huge Amounts of Potential Funders – Kickstarter may not guarantee you a single pledge to your case, but they do put millions of sets of eyes in front of the website and platform every month, meaning that the funding backers are out there to be solicited.
- Gives A Platform and Forum For Your Project – Kickstarter does give you a page to call your own where your project details, pictures, and designs are showcased so that backers may donate to your project.
- Accepts Pledges and Payment – The platform takes both pledges and then credit card payments for you once the funding goal is met.
- Delivers Funding – After your project goal is entirely met and they have collected the financial transactions on your behalf, Kickstarter pays out the funds raised to your account.
- Publishes Funding Backer Comments and Reviews – When the project is all said and done, backers will want to comment on how well the creator kept them updated on the project in progress and deliver the promised rewards at the end or during the creative project in process. This is one of the more important services that Kickstarter actually provides potential funding backers who may wish to know more about the kind of person they are backing up financially.
Kickstarter has a headquarters office in New York City. It is found at 58 Kent St, Brooklyn, New York 11222. Even though they are the largest crowdfunding platform in the U.S. with around 118 employees, they do not maintain additional offices.
Kickstarter Interface Screenshots
The company is very concerned about safety on its platform. They have an integrity team whose function is to review reports published by members of the community and to watch benevolently over the platform interactions. This team’s goal is to ensure that Kickstarter is the most effective and safest platform in crowdfunding. Through a combination of both automated tools and complicated computer algorithms, the integrity team is able to both identify and look into suspicious or potentially fraudulent projects and activity. They are quick to suspend any projects that are abusive or fraudulent.
Regarding safety of information of funding backers and creators, Kickstarter offers a two factor authentication process that helps make sure your login credentials are not stolen. Each of the transactions put through on the platform is done over their secure server and is protected with SSL 128 bit encryption. This is the standard in the online merchant industry for secure e-commerce transactions. Once credit card information arrives, it is then safely stored on a dedicated and well-secured database.
Kickstarter Complaints and Ratings
Kickstarter enjoys the Better Business Bureau's best rating of A+. The reasons that it claims this highest standard of approval from the BBB include:
- The number of years that Kickstarter has been in business.
- Number of complaints that have been filed against the company (with the BBB) for a business of its size.
- Responses to the 40 complaints lodged against Kickstarter.
- Their resolution of the complaints filed against Kickstarter.
Kickstarter had 40 complaints filed against them that they closed with the BBB during the past 36 months, of which 20 were settled over the prior 12 months.
Kickstarter Customer Support
The company’s email address and phone numbers are not given out on the site. Customer support is limited to the frequently asked questions section, with additional measures beyond this being limited to opening an online customer support ticket. They will respond to you as they are able. We found the lack of good customer support to be the most disappointing feature of Kickstarter.
Kickstarter Costs & Fees
Projects that are funded successfully are charged a 5% service fee from the funds that the creator collects. Besides this, the payment processing fee is between 3% and 5%. For projects that did not meet their funding goals and obtain any funding as a result, no fees are charged.
Final Words on Kickstarter
Kickstarter delivers on what it promises— to give creative and technological projects the chance to obtain funding. Their process of weeding out well-focused projects from those that are not sharply presented helps to ensure that only solid projects are posted on the platform for funding. For a funding backer looking to get involved in creative works in process, this presents great opportunities with tens of thousands of projects from which to choose.
For the creators themselves who are trying to get funding, the prognosis is less rosy, as a little better than a third of them are able to meet their goals and obtain any funding. The biggest weakness in the system from their point of view revolves around the lack of support and marketing assistance in getting the word out on a given project. It does not matter how good a creative project is when it comes to funding if it is invisible.
Pros of Kickstarter Review
- The platform is definitely user-friendly and easy to understand, for funding backers especially.
- Creators receive immediate notification on any pledges from funders once they come in.
- Real time information on all of the project backers is provided, making it easy to strategize for additional funding.
- Kickstarter permits creators to upload large files to the description of the campaign and other updates to improve the page’s design.
Cons of Kickstarter Review
- It is difficult to set up a page that will attract unknown funding backers, particularly if you are not familiar with Photoshop and Adobe Illustrator programs.
- There is no help whatsoever in promoting your creative or technological project offered by the platform, website, or company.
- PayPal is not accepted for contributions, which makes it harder for international backers from outside the U.S. to effectively participate.
Kickstarter Review Summary
Kickstarter gives creators something that they have always lacked when it comes to funding: an opportunity and a platform on which they can reach out to interested funding backers to solicit contributions to their creative or technological work. Funding backers gain the chance to discover talented artists and creators and to participate in their projects' success and completion.