Kickstarter: Investment Resource
December 21, 2011 in Tech News
A revolutionary mechanism for funding independent projects, films, inventions, fashion designs, and publications has arrived. Kickstarter, “an online threshhold pledge system for funding creative projects,” has funded a “diverse array of endeavors, ranging from indie film and music, to journalism, solar energy technology and food-related projects.” It’s a website that lets everyday people make investments in projects they think are interesting to help them get off the ground. Investments are usually small, with supporters usually getting early access to a product or other incentives when the project gets completed. Kickstarter.com launched in April 2009 and has proven effective for many innovative self-starters just looking for the monetary backing to get their projects on the market. Its founders are Perry Chen, Yancey Strickler, and Charles Adler.
In order to post a project on the site, an application must be completed. Kickstarter provides guidelines for the types of projects that may gain approval. The project owners choose a target minimum investment goal and a deadline to reach that goal. If the goal is reached by the deadline, the money pledged by donors is collected via Amazon Payments and the money is released to the project owners. A U.S. bank account is required in order to initate a project. Kickstarter keeps 5% of the funds raised and Amazon charges an additional 3-5% for its services. If the target minimum is not achieved, no payments are distributed to the project owners. Sponsors are advised, however, to use their own judgment in choosing which projects to fund as there is no guarantee that those who post their projects on Kickstarter will deliver on the project or use the acquired funds to follow through on the project.
Kickstarter has raised $75 million dollars for over 10,000 projects since April 2009. The project success rate is 44%. More recently, Kickstarter has proven especially effective for Steve Issacs, the inventor of a new silicone based keyboard for the iPad called TouchFire (see blog piece created on December 19, 2011). He raised $201,400 to get the production of his invention underway. His target minimum was only $10,000. Indeed, Kickstarter has proven to be the financial kick inventors can turn to for turning ideas into realities.













