Kickstarter

Definition

Kickstarter is a crowdfunding platform that helps creators fund their projects by connecting them with backers who are willing to pledge money in exchange for rewards. This platform emphasizes creative projects such as art, music, film, and technology, allowing individuals and organizations to raise funds from a large pool of people rather than relying solely on traditional funding sources. By leveraging crowdsourcing, Kickstarter empowers innovators and entrepreneurs to bring their ideas to life while fostering community support and engagement.

5 Must Know Facts For Your Next Test

1. Kickstarter was launched in 2009 and has since become one of the most well-known crowdfunding platforms, with thousands of successful projects funded each year.
2. Projects on Kickstarter must meet specific guidelines and goals to be eligible for funding; if a project does not reach its funding goal, no money is collected from backers.
3. Creators can set various reward tiers for backers, incentivizing higher contributions with unique rewards such as exclusive products or experiences.
4. The platform fosters a sense of community by allowing backers to interact with creators and share updates throughout the project's development.
5. Kickstarter has funded a diverse range of projects, from innovative gadgets and board games to artistic endeavors and social initiatives, demonstrating the platform's broad appeal.

Review Questions

• How does Kickstarter facilitate the relationship between creators and backers, and what role does this play in the crowdfunding ecosystem?
  • Kickstarter acts as an intermediary that connects creators with potential backers who are interested in supporting innovative projects. By allowing creators to present their ideas and offering various reward tiers, backers can choose how much to contribute based on the value they perceive in the project. This relationship is crucial in the crowdfunding ecosystem as it empowers individuals to support causes they believe in while giving creators access to funds that might not be available through traditional means.
• Discuss the importance of setting a funding goal on Kickstarter and its implications for project success.
  • Setting a funding goal on Kickstarter is vital because it determines whether a project is funded or not. If a project does not meet its goal by the deadline, no funds are collected from backers. This all-or-nothing approach encourages creators to carefully consider their funding needs and promote their projects effectively. It also builds trust with backers, as they know that their contributions will only be used if the project is viable and supported by enough interest.
• Evaluate how Kickstarter has transformed the traditional funding landscape for creative projects and what implications this has for future innovations.
  • Kickstarter has significantly transformed the traditional funding landscape by democratizing access to capital for creative projects. This shift allows independent creators and entrepreneurs to bypass conventional financing routes like banks or venture capitalists, fostering innovation from diverse sources. The implications for future innovations include a more vibrant marketplace for unique ideas and products, increased collaboration among creators and backers, and potential shifts in industry standards as crowdfunded projects challenge established norms and practices.

Related terms

Crowdfunding: A method of raising funds from a large number of people, typically via the internet, where contributors donate money in exchange for rewards or equity.

Backer: An individual who supports a project on Kickstarter by pledging money in exchange for rewards offered by the project creator.

Reward-based funding: A type of crowdfunding where backers receive non-financial incentives or rewards in return for their financial contributions to a project.