The start of a fresh year often brings new hope to budding entrepreneurs, as well as those beginning creative get-out-of-debt initiatives after the holidays. However, funding a business is no easy feat, which is why Kickstarter.com is gaining recognition as the latest entrepreneurial platform.
Gone are the days when making it big took an individual’s support and backing. Kickstarter.com is a website that encourages the masses–including friends, family, local communities and even the global sphere–to showcase projects, support creators with startup funding and turn new ideas and creativity into reality.
Kickstarter.com Kicks Up Entrepreneur Funding
The concept of Kickstarter.com is easy to follow, as the website buckets its functionality into project creators/starters and project backers/discoverers.
Project creators are those undiscovered gems in our society who need startup funding for a published concept, idea or talent. When a project reaches its funding goal (by the deadline), project creators are given the funds to execute it.
On the flipside, project backers scour Kickstarter.com for a project they are passionate about and can show their support by providing the entrepreneur funding to bring these projects to their startup funding goal.
In return, they can opt to receive rewards from the successful project in the form of the product being funded. Rewards can be a CD of the singer you’ve just backed, a signed t-shirt or other merchandise affiliated with the project.
Guidelines for Project Starters
Don’t let the simplicity of using Kickstarter.com fool you–there are concrete rules to using it:
Projects must fall into a Kickstarter.com category: Presently, the only project categories that Kickstarter.com helps fund are
- Art
- Comics
- Dance
- Design
- Fashion
- Film
- Food
- Games
- Music
- Photography
This stipulation is meant to preserve Kickstarter.com’s intent to support creative projects only.
Projects must have a beginning and end: A key point of the website is to help entrepreneurs boost their project with startup funding, not life-long funding. Projects are permitted to run from 1-60 days and must have a concrete end goal.
For example, an aspiring singer may have a funding end goal of $10,000 to be used toward recording their first full album, as opposed to a startup funding goal of $10,000 going toward “becoming famous.” Projects must be measurable.
Projects cannot be for charity, cause-funding or “fund my life:” In other words, American Red Cross fundraising projects and “pay off my credit card” projects are not allowed on Kickstarter.com. Again, this is to ensure that creative talents and ideas have a dedicated space to grow.
Rewards cannot be financial incentives: The rewards project backers receive cannot include ownership of the project, shares of project profits or loan repayments. Rewards are intended to enhance the “experience” of backing a project–like receive a one-of-a-kind painting from an artist you supported.
Project starters must be 18 or older and a U.S. resident: In addition to the ethical guidelines, Kickstarter.com has standard age and residency requirements like having a social security number (or TIN), a U.S. bank account and credit card, a current U.S. address and U.S. ID.
The guidelines to starting your own project with Kickstarter.com are fairly simple, but when it comes to payout, there are a couple more hands that take a modest slice. While most of startup funding goes directly to starters of successful projects, Kickstarter.com applies a 5 percent fee on all projects that reach the funding goal.
Additionally, Amazon Payments–the entity that manages the transfer of money on Kickstarter.com–takes between 3 to 5 percent of funding from projects which have reached their goal.
Benefits of Funding a Business Through Kickstarter.com
Banding the influence of the community at large is an internet phenomenon that has been wildly successful, which is why the theory of “crowdfunding” through Kickstarter.com makes sense in the entrepreneurial world. The benefit of accomplishing a project’s startup funding goal resonates with both project starters and project backers in a number of ways.
Project Starters Get Street Cred
In addition to gaining startup funding, entrepreneurs can maintain motivational momentum from the community to pursue their goals, and conversely, learn where failed projects can be improved. Seeing the growing financial support from peers can help encourage entrepreneurial visionaries of our time to continue innovating and sharing their creativity on a nationwide and even global scale.
Additionally, intellectual property and ownership of projects belong solely to the project starter. Kickstarter.com remains relatively hands-off with ideas and only serves as a forum to showcase entrepreneurial projects. This ensures project starters are fully credited for their work.
For this reason, Kickstarter.com has developed a reputation as a reliable and reputable option for starting a small business or funding a project. Major media outlets such as CNN and New York Times have featured Kickstarter, lending projects generated through the site additional legitimacy.
Instead of fearing rejection or ridicule as a wacky inventor, your ideas can meet the public eye through a welcoming platform.
Project Backers Get Rewarded
Aside from the satisfaction of knowing you’ve helped a gifted entrepreneur accomplish a goal, project backers see benefits more tangible than feel-good vibes.
To avoid the exchange of financial incentives, Kickstarter.com requires that all projects offer project backers an array of “rewards.” Project backers can get a unique project-related experience, limited edition product or exclusive work.
When pledging an amount toward a project, project backers are not required to select a reward–but everyone likes to feel special, right? Sure they do.
Recently, I decided to back a current project called “London Calling–Los Angeles Fashion Council.” The goal is to raise $10,000 and send five leading Los Angeles fashion designers to London in an effort to showcase homegrown talent.
I pledged $50 and opted for the reward of getting one original design sketch of my choice and earn special mention in the London event program.
This was the first project I have backed, and I was truly excited for the chance to lend a boost to a project I believed in and get an original sketch from a person who could easily be the next breakthrough designer.
However, if the total startup funding goal is not met by the deadline, neither party–project starters or project backers–are held accountable to uphold their reward offer or pledge. For some project backers, this detail is a clear benefit. No harm, no foul.
Kickstarter.com is a low-risk option for those who want help fund a project they adamantly support. Should projects not meet their startup funding goals by the per-determined deadline, project backers are not charged for the amount they have pledged. This all-or-nothing funding tactic gives backers more confidence to step up to the plate and support new entrepreneurs.
Entrepreneur Funding Obstacles
While Kickstarter.com has championed many successful projects in the past, there are a few points that entrepreneurs must acknowledge before starting a new project.
Well, it’s All-or-Nothing
Even if a project reaches 95 percent of the startup funding goal by the deadline, project starters don’t see a penny and the project is archived. Unlike other fundraising platforms, project backers who simply want to donate funds to a project without that project necessarily meeting its concrete goal are unable to do so. This is a difficult reality for some entrepreneurs.
Declined Credit Card Pledges
Project starters must rely on the integrity of their project’s backers. Amazon Payments only records credit card pledges during the life of a project. If entrepreneur funding goals have been reached by the deadline, only then does Amazon Payments collect pledge funds from project backers.
However, should a project backer’s credit card be declined for any reason, they may be dropped from the project if immediate action is not taken. In other words, their credit card account is not charged, leaving a once-successful project to come up short on funding.
The silver lining lies in Amazon Payments’ 7-day window for project backers to correct the issue. To ensure that project backers resolve any problems with payment, Amazon Payments sends e-mail reminders every 48 hours within the 7-day period. Project starters must then rely on the integrity of their supporters and hope that time is on their side.
It’s Up to the People
Kickstarter.com thrives on the uncontrollable factor of community support. Many entrepreneurs are faced with the challenge of presenting the public with a project that inspires enough enthusiasm.
Kelsi Smith, project starter of “London Calling” expressed just how vital local communities play in the Kickstarter.com process:
“I think Kickstarter is great for entrepreneurs but it’s really dependent on the kind of community you have. If you have a community that is dedicated to your cause, then you’re golden, if you don’t then it’s fairly useless–at least in my experience.”
As much as entrepreneurs try to rouse their communities to action, it may be ineffective if the community lacks commitment to the end goal.
Ideas Are on the Table
The last aspect to note about Kickstarter.com is that the website is all about transparency and project starters are expected to follow suit. The totality of the project–from a broad idea to its intricate details–is showcased on project pages.
Entrepreneurs who are wary of intellectual thievery and thus, prefer to remain secretive about the workings of the project, may be better served funding a business elsewhere.
Is Kickstarter.com Right for You?
Ultimately, Kickstarter.com is an engaging way for entrepreneurs and supporters of innovation to come together and watch a project grow from start to finish. When entering any business venture, staging the vision is the essential first-step and Kickstarter.com helps to do just that.
Hey every one my name is Oliver graham and this is my kickstarter project about my new comic book! Go to http://www.kickstarter.com/projects/640520835/planet-melecto-the-beginning to check it out !