Your Ultimate Guide to Understanding How Kickstarter Works

Kickstarter has revolutionized the way entrepreneurs and creators can fund their projects. Since its launch in 2009, Kickstarter has helped to fund over 180,000 creative projects, with over $5 billion in pledges from more than 17 million backers. But for those who are new to crowdfunding, launching a successful campaign on Kickstarter can be a daunting task. With so many factors to consider, such as goal setting, marketing, and rewards, it’s easy to feel overwhelmed. That’s why we’ve created this comprehensive guide to help you understand how Kickstarter works and give you the tools you need to create a successful campaign.

Introduction

Kickstarter is a platform that has revolutionized the way people fund their projects. It has enabled individuals and groups to raise money for their creative and entrepreneurial ventures in an innovative way. Crowdfunding has become a popular method of funding, and Kickstarter has been at the forefront of this movement since its inception in 2009.

In this blog post, we will delve into how Kickstarter works and provide valuable insights on how to create a successful campaign. We will explore the process of crowdfunding, from setting up a project to receiving funding from backers. We will also discuss the fees associated with Kickstarter and the pros and cons of using this platform.

Whether you are an artist, designer, musician, filmmaker, or entrepreneur, Kickstarter offers a unique opportunity to showcase your work and attract funding from supporters around the world. With over 18 million backers and $6 billion pledged to date, Kickstarter has proven to be a powerful tool for creators to bring their ideas to life.

So, if you’re curious about how Kickstarter works and want to learn more about crowdfunding, read on! Our comprehensive guide will provide you with all the information you need to get started and make the most of this innovative platform.

What is Kickstarter?

Kickstarter is a popular crowdfunding platform that helps project creators bring their ideas to life. In simple terms, crowdfunding refers to the practice of funding a project by raising small amounts of money from a large group of people, typically through the internet.

On Kickstarter, project creators set up campaigns that outline their idea and how much money they need to complete it. They can offer different levels of rewards to backers based on the amount of money pledged, such as early access to the product or exclusive merchandise.

Projects on Kickstarter can vary widely in scope and topic, from innovative technology gadgets to creative arts projects like films and music albums. However, it’s important to note that not all projects are guaranteed to be successful or even completed, and backers take on the risk of supporting these projects.

One of the key benefits of Kickstarter is its ability to democratize funding for creative and innovative projects that may not have been able to secure traditional funding from banks or investors. It also allows creators to test the market demand for their product before investing significant resources into it.

Overall, Kickstarter offers a unique platform for entrepreneurs, artists, and creators to gain funding and support for their projects, while also giving backers the opportunity to be a part of something new and exciting.

How does Kickstarter work?

Kickstarter is a crowdfunding platform that connects entrepreneurs and creators with potential backers who can help fund their projects. The platform is easy to use, but how does Kickstarter work exactly?

First, a project creator sets up a campaign on the platform and establishes a funding goal for their project. They then offer rewards to backers based on their pledge amount. These rewards can range from early access to the finished product to exclusive merchandise or experiences related to the project.

Once the campaign is live, backers can pledge money towards the project in exchange for the offered rewards. If the funding goal is met by the end of the campaign, the creator receives the pledged funds, minus Kickstarter’s fees for payment processing and administration. If the goal is not met, backers are not charged and the project is not funded.

It’s important to note that Kickstarter operates on an all-or-nothing funding model, meaning that if the goal is not met, the creator doesn’t receive any funds at all. This helps ensure that only viable and well-planned projects receive funding.

Throughout the campaign, creators can communicate with their backers through project updates and backer-only messages to keep them informed of the project’s progress and any important developments. Backers also have the ability to increase their pledge amount or even cancel their pledge at any time during the campaign.

In summary, Kickstarter works by connecting project creators with backers who can pledge money towards the project in exchange for rewards. If the funding goal is met, the creator receives the pledged funds after Kickstarter’s fees are deducted. It’s an excellent way to bring creative projects to life with the support of a community of interested and invested backers.

Creating a Kickstarter Campaign

If you have a project idea that you believe in and want to fund, Kickstarter is an excellent platform to turn your dream into a reality. However, creating a successful Kickstarter campaign takes more than just a good idea – it requires careful planning, goal-setting, and effective marketing.

Here are the key steps to creating a Kickstarter campaign that will attract backers and achieve your funding goals:

Project Idea: The first step is to have a well-defined project idea that is unique and meets the needs of your target audience. Consider the scope of your project and how it will benefit your potential backers.
Goal Setting: Once you have a clear project idea, set realistic funding goals for your campaign. Be sure to factor in all the costs associated with your project, including production, shipping, and fulfillment.
Video Production: Creating a compelling video is crucial to the success of your Kickstarter campaign. Your video should showcase your project, explain why it’s important, and build excitement around it. Keep in mind that backers are more likely to fund projects with engaging videos.
Marketing: To get your project noticed by potential backers, you’ll need to market it effectively. Reach out to your existing network and social media channels to build buzz. Consider partnering with influencers or blogs within your industry to increase visibility.

It’s essential to remember that running a Kickstarter campaign is not a one-person job. You’ll need a team of people who can help make your campaign a success, including designers, writers, and project managers.

By following these steps and building a strong team, you’ll be able to create a strong Kickstarter campaign that has the potential to reach its funding goals.

Kickstarter Fees

One of the most important things to consider when creating a Kickstarter campaign is the fees involved. Kickstarter collects a fee on all successfully funded projects, as well as payment processing fees and refunds.

Campaign Fees

Kickstarter charges a 5% fee on all successfully funded projects. This means that if your project reaches its funding goal of $10,000, Kickstarter will take $500 of that amount as their fee.

It’s worth noting that if your project doesn’t reach its funding goal, you won’t be charged any fees. This means that there’s no risk involved in launching a Kickstarter campaign, as long as you set a realistic funding goal and promote your project effectively.

Payment Processing Fees

In addition to the campaign fee, Kickstarter also charges payment processing fees. These fees vary depending on the location of the project creator and the currency used in the campaign.

For U.S.-based campaigns, payment processing fees are typically around 3-5% of the total amount raised. For international campaigns, these fees can be higher due to the additional costs associated with processing payments across borders.

Refunds

If a backer decides to cancel their pledge or if they are entitled to a refund for any reason, Kickstarter will refund the money they pledged minus the fees. This means that if a backer pledges $100 to a project and then requests a refund, they will receive $95 back ($100 minus the 5% campaign fee).

It’s important to note that if a project creator cancels their campaign before it ends or fails to deliver the rewards promised to backers, Kickstarter may issue refunds to backers at their discretion.

Overall, while Kickstarter fees may seem like a significant cost to bear, they are necessary to keep the platform running smoothly and to ensure that all projects are treated fairly. By setting a realistic funding goal, promoting your project effectively, and delivering on your promises to backers, you can minimize the fees you pay and maximize your chances of a successful campaign.

Pros and Cons of Kickstarter

Kickstarter has become a popular platform for entrepreneurs and creatives to launch their projects and bring their ideas to life. However, like any other crowdfunding platform, it comes with both advantages and disadvantages. Here are some pros and cons of Kickstarter that you should consider before launching your campaign.

Advantages

Access to Funding

One of the biggest advantages of Kickstarter is that it gives entrepreneurs access to a large pool of potential investors who are interested in supporting creative and innovative projects. This means that projects that may have been rejected by traditional lenders or investors due to their unconventional nature have a chance to receive funding.

Feedback and Marketing Opportunities

Launching a campaign on Kickstarter can help you gauge interest in your project and receive valuable feedback from backers. Additionally, a successful Kickstarter campaign can provide marketing opportunities and help establish a community around your project.

No Debt or Equity

Unlike traditional forms of funding, such as loans or venture capital, Kickstarter does not involve taking on debt or giving up equity in your company. This gives you more freedom and control over your project and its direction.

Disadvantages

All-or-Nothing Funding

Kickstarter operates on an all-or-nothing funding model, which means that if you don’t reach your funding goal, you won’t receive any of the pledged funds. While this approach can motivate creators to work harder to achieve their goals, it can also lead to disappointment and frustration if the project fails to get funded.

Fees

Kickstarter charges a 5% fee on all successfully funded projects, in addition to payment processing fees of 3-5%. These fees can add up and eat into the project’s budget, making it more difficult to achieve your goals.

Risks

Launching a Kickstarter campaign involves risks, including the possibility of not reaching your funding goal, delays in production or shipping, and unanticipated costs. Creators need to carefully weigh these risks and plan accordingly to minimize their impact.

In conclusion, Kickstarter can be a powerful tool for bringing your project to life, but it’s important to consider the pros and cons before launching a campaign. With careful planning, realistic goals, and a solid marketing strategy, you can increase your chances of success on this popular crowdfunding platform.

Conclusion

In conclusion, Kickstarter provides an innovative platform for entrepreneurs and creators to turn their ideas into reality. From technology to fashion, art to music, Kickstarter has helped fund a variety of projects that may not have seen the light of day otherwise.

While it can be a great way to get funding for your project without relying on traditional investors, there are also some downsides to consider. The competition on Kickstarter can be fierce, and it’s important to have a solid marketing plan in place to make your campaign stand out. Additionally, the fees associated with using Kickstarter can eat into your funding as well.

However, for those who are willing to put in the time and effort needed to create a successful campaign, Kickstarter can be an excellent way to bring their vision to life. It allows creators to connect with backers from all over the world, building a community around their project that can help them grow even beyond the initial campaign.

Overall, while Kickstarter may not be the perfect solution for every project or every creator, it is definitely worth considering for those looking to launch something new and exciting. With the right approach, it can provide the funding and support needed to turn creative ideas into reality.
As you can see, Kickstarter is a powerful platform that enables entrepreneurs and creators to bring their ideas to life by gaining support from a global community of backers. By following the steps outlined in this guide, you can create a compelling campaign that will attract attention and funding. With Kickstarter’s innovative approach to crowdfunding, you can bypass traditional obstacles and bring your vision to fruition. However, it is important to remember that success on Kickstarter requires careful planning, hard work, and dedication. As with any venture, there are risks involved, but the rewards can be immeasurable. So if you have a great idea and the passion to make it happen, why not consider launching a Kickstarter campaign today?