Kickstarter

Definition

Kickstarter is a crowdfunding platform that allows creators to fund their projects by collecting small contributions from a large number of people, usually through an online campaign. This platform has revolutionized the way creative projects, such as films, music albums, and games, are financed by enabling individuals to showcase their ideas and seek financial backing directly from potential supporters.

5 Must Know Facts For Your Next Test

1. Kickstarter was launched in 2009 and has since funded over 200,000 projects across various categories including arts, technology, and games.
2. Each Kickstarter project must meet a funding goal within a specified time frame; if the goal is not reached, no funds are collected from backers.
3. Creators set different reward tiers for backers based on their pledge amounts, encouraging higher contributions with exclusive perks.
4. Kickstarter charges a fee of 5% on successfully funded projects, plus payment processing fees, making it essential for creators to factor these costs into their funding goals.
5. The platform has become a crucial resource for independent creators who might not have access to traditional financing methods like loans or venture capital.

Review Questions

• How does Kickstarter facilitate the connection between creators and potential backers?
  • Kickstarter acts as an intermediary that enables creators to present their projects directly to the public, thereby attracting potential backers who share an interest in those projects. By showcasing detailed descriptions, visuals, and funding goals, creators can effectively communicate their vision and motivate people to support them. The interactive nature of the platform allows backers to ask questions and engage with creators, fostering a sense of community around the projects.
• What are the key differences between Kickstarter and other crowdfunding platforms?
  • Kickstarter focuses primarily on creative projects and enforces an all-or-nothing funding model, meaning projects must reach their set funding goals to receive any funds. Other platforms may allow for ongoing funding or do not require specific goals to be met. Additionally, Kickstarter offers unique reward structures that incentivize backers at various pledge levels, while some other platforms may operate differently regarding rewards or fees.
• Evaluate the impact of Kickstarter on the creative industries and its implications for traditional funding methods.
  • Kickstarter has significantly transformed how creative projects are financed, allowing individuals with innovative ideas to bypass traditional funding routes like loans or investors. This shift empowers independent creators and diversifies the types of projects that can gain traction in the market. However, it also raises questions about the sustainability of such crowdfunding models and their ability to support long-term creative endeavors compared to traditional financing methods that often provide more substantial initial capital and mentorship.

Related terms

Crowdfunding: The practice of raising small amounts of money from a large number of people, typically via the internet, to fund a new project or venture.

Backer: An individual who supports a project on Kickstarter by contributing funds, often in exchange for rewards or incentives offered by the creator.

Pledge: The amount of money that a backer commits to contribute towards a Kickstarter project, which may also determine the rewards they receive.