Kickstarter, an American public benefit corporation, runs a global crowdfunding platform focused on creativity from films, games, and music to art, design, and technology. Crowdfunding is a way of raising finance by asking many people each for a small amount of money.
Kickstarter is full of ambitious, innovative, and imaginative ideas that are brought to life through the direct support of others. Kickstarter helps artists, musicians, filmmakers, designers, and other creators find the resources and support they need to make their ideas a reality. Over millions of people from every continent on earth, have backed a Kickstarter project. Every project is independently crafted while friends, fans and total strangers offer to fund them in return for rewards or the finished product itself.
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.
Project creators set a funding goal and a deadline, plus different levels of rewards can receive by pledging specific amounts. Once people have funded the project by pledging a small or large amount of money to meet the creators goal by the deadline, development and production of those projects can carry out.
Kickstarter funding rules
Kickstarter uses an All-or-nothing funding model. If the project doesn’t reach its goal, then funds don’t get collected, and no money change hands. All-or-nothing funding makes it easier for backers to pledge to the user project with confidence to get the job done.
If user funding goal should be the minimum amount to make what user promised and fulfill all rewards. Some steps to setting that goal is figuring out a budget.
- Make a list
Write down every possible expense, like shipping tape and bubble wrap. For larger expenses, research the best price. It’s okay if the number is bigger than expected. Even if project feels simple, it’s best to make sure every step is accounted for.
- Consider your reach
Kickstarter is a great way to share your ideas with new people. Still, most of your support will come from your core networks, and the people most familiar with your work. Consider the audiences you can tap into, from friends and fans to online communities, and make a conservative estimate of how many backers you can realistically bring in.
- Set a deadline
Your funding period can last anywhere from one to 60 days. Shorter periods set a tone of confidence, help motivate people to back, and let you make a planned, concerted push to spread the word.
Kickstarter Fee calculator
Kickstarter created a free calculator to estimate the costs of the campaign. It built’s in Google Sheets. The document is read only. So, the first thing is to make a copy of Google Drive account.
An important note is you don’t need to calculate the costs if the fund is less than your goal and not charged any fees by Kickstarter for projects.
The calculator uses to take out the fees for the payment processor. These fees depend on the number of pledges that your campaign receives. The calculator is just to help you estimate. This will not reflect 100% of the true cost of the campaign.
The basic structure in the United States is that you pay Kickstarter a flat 5% of the total funds that you raise. This fee is paid directly to Kickstarter at the end of your successful campaign.
Also, Kickstarter added a micropledge option that lowers the cost of the payment processing fees for pledges that are less than $10. For any pledge under $10, you pay an increased percent fee of 5% with an additional $0.05 on top.
Kickstarter found a lot of success in the crowdfunding space, many competitors have entered the marketplace, providing good alternatives.
Some crowdfunding alternatives to Kickstarter
Indiegogo is an international crowdfunding site that helped creative people fund projects such as film or music, but it has expanded to include almost any project imaginable.
The service is free to sign up, create a campaign and even contribute to a campaign. Once a project raises funds, Indiegogo charges a 9% fee on the funds raised.
RocketHub is a crowdfunding platform that helps fund science, business and art projects. If a person reaches his goal on RocketHub, the company takes a 4% commission fee and an additional 4% fee on credit card transactions. If the goal not reach, the company takes 8% of the funding raised plus the 4% credit card handling fee.
Pozible is an Australian crowdfunding platform for creative projects and ideas. It also doubles as a community-building tool for those looking to raise money and build communities around their projects
Pozible charges a 5% standard fee on all funds raised and an additional 2.4% on transactions made in Australia and 3.4% on international transactions.
FundRazr, a Canadian-based company working on Facebook app. The app allows users to set up crowdfunding pages on Facebook. Even embed existing fundraising apps on a user’s Facebook page.
If a project can raise money for positive existing causes such as medical care, memorials and animal rescue, in addition to raising money for its own campaign.
FundRazr charges only 5% fee, even if the goal not reach. This is lower than many other crowdfunding websites. However, the company charges an additional 2.9% on all transactions made during the life of the campaign.