Written by 5ivecanons Staff
Kickstarter has been funding ideas since 2009, after its inception by Perry Chen, Yancey Strickler, and Charles Adler.
Kickstarter’s success, both in terms of their site and funded ideas, can be attributed to their simple, transparent process of crowdfunding.
Their formula is simple. Aspiring artists, musicians social activists, inventors, whatever, pitch their idea online for free via Kickstarters domain. A pitch typically conceptualizes the project outlining exactly how it will operate and what is needed to bring it to life. If a project reaches it’s financial goal, the person behind the kickstarter will receive all the funding pledged to them even if it exceeds their original goal. If the project fails to reach it’s financial goal, pledged funding will be returned to investors.
Successful Kickstarter campaigns include a well drawn out budget within their pitch allocating exactly where each dollar requested will go. It is important for Kickstarter hopefuls to create an accurate budget based on the reality of what’s needed to bring their idea into fruition rather than asking for absurd idealistic “financial requirements.” Small donations should be encouraged. The most successful Kickstarter campaigns will offer funders a return on there investment i.e. a free product sample, copy of a film, mp3 download, etc.
According to this infographic, the most popular Kickstarter ideas fall under the categories of Film and Video and Music.
However the categories with the highest rate of success are Dance and Theater. Interestingly, Gaming ranks number one in both backers and funding but is near the bottom of the list in regards to success rate. This is likely because gaming projects are very expensive and while many people are willing to back them, the inflated costs to bring gaming ideas to life is usually far too high to be attained. Surprisingly, technology ranks near the bottom in both backers and success rate. This suggests that people who invest in Kickstarter are more concerned with funding entertainment based ideas than technological innovation.
Kickstarter isn’t foolproof, but it’s close. The site allows investors to fund projects they believe in but by returning donations if a project fails to meet it’s goal, assures them they’re not funding a sinking ship. As far as the site itself, Kickstarter will never fail because it allows users a venue to sell their product while taking no financial risks on the projects themselves. And oh yeah, with successful projects Kickstarter takes 5% of the income generated. They always shave a little off the top.
Photo credit: The wolf