What is Kickstarter?
Kickstarter is an American public-benefit corporation based in Brooklyn, New York, that maintains a global crowdfunding platform focused on creativity and merchandising. The company's stated mission is to "help bring creative projects to life". Kickstarter has reportedly received more than $1.9 billion in pledges from 9.4 million backers to fund 257,000 creative projects, such as films, music, stage shows, comics, journalism, video games, technology and food-related projects.
People who back Kickstarter projects are offered tangible rewards or experiences in exchange for their pledges. This model traces its roots to subscription model of arts patronage, where artists would go directly to their audiences to fund their work.
Kickstarter is one of a number of crowdfunding platforms for gathering money from the public, which circumvents traditional avenues of investment. Project creators choose a deadline and a minimum funding goal. If the goal is not met by the deadline, no funds are collected (a kind of assurance contract).
The kickstarter platform is open to backers from anywhere in the world and to creators from the many countries like the US, UK, Canada, Australia, New Zealand, The Netherlands, Denmark, Ireland, Norway, Sweden, Spain, France, Germany, Austria, Italy, Belgium, Luxembourg, Switzerland and Mexico.
Kickstarter applies a 5% fee on the total amount of the funds raised. Their payments processor applies an additional 3–5% fee. Unlike many forums for fundraising or investment, Kickstarter claims no ownership over the projects and the work they produce. The web pages of projects launched on the site are permanently archived and accessible to the public. After funding is completed, projects and uploaded media cannot be edited or removed from the site.
There is no guarantee that people who post projects on Kickstarter will deliver on their projects, use the money to implement their projects, or that the completed projects will meet backers' expectations. Kickstarter advises backers to use their own judgment on supporting a project. They also warn project leaders that they could be liable for legal damages from backers for failure to deliver on promises. Projects might also fail even after a successful fundraising campaign when creators underestimate the total costs required or technical difficulties to be overcome.