Moonpreneur
Update: This article was last updated on 12th December 2023 to reflect the accuracy and up-to-date information on the page.
How often have you encountered situations where you have an amazing idea but cannot execute it due to being short of funds?
You’re not alone—many innovators and entrepreneurs face this challenge. Finding someone interested in your idea and willing to finance it can be tough.
So, how do you go about finding such people out of nowhere? Is there a quick method to do this?
Well, that’s where crowdfunding platforms like Kickstarter come into the picture. If you have a dream project in mind that could use financial assistance, this blog will introduce you to all that you need to know about Kickstarter, one of the top online crowdfunding platforms today.
Recommended for reading: TOP 5 ENTREPRENEURSHIP STATS FOR 2023
What Is Kickstarter?
Kickstarter is a platform where two types of people interact with each other for their respective profit.
The first category is that of the creators. These people develop original and influential ideas and present them on the platform. The second category is that of the backers. Backers browse through different ideas from several creators, find something that excites them, and fund the same.
The creators use different kinds of media like images, text, and videos to present their ideas. They also offer reward levels for backers interested in pledging a certain amount for the project. Naturally, the higher the pledge amount, the higher the rewards.
How Kickstarter Works
- Start a Project: The first step in starting a project on Kickstarter is to register and create a page for the project. Make certain that your project page has a video, a description of the project, and a list of prizes for supporters.
- Decide on a Funding Target: Indicate how much you want to raise for the project. This acts as the financial target required to ensure the success of your project.
- Set a Time Limit: Choose a date by which you must complete your project and reach your financial target.
- Submit Your Project: Send your finished project page to Kickstarter so that it may be reviewed. Kickstarter will check that your project complies with their rules by reviewing it.
- Start Your Project: Start your project as soon as it is approved. This lets others know about your initiative and enables funders to start making contributions.
- Reach Your Funding Objective: The money that has been committed to your project will be given to you if your funding objective is accomplished by the deadline. You will not be paid if the financing target is not reached.
Recommended for reading: 5 BEST SCIENCE PROJECT IDEAS FOR KIDS
How Can a Creator Start a Project?
A creator can present their idea on the Kickstarter platform and set a specific deadline and a funding goal for the same. It is to be noted that to be approved on the platform; there are certain Kickstarter guidelines they must follow. Considering these terms, only 75% of the projects submitted on the platform get approved. Creators can present ideas in different fields, such as tech, writing, designing, illustrations, art, etc.
Also, it is necessary that the creators have to reach the funding goal before the deadline set by them. If this fails, no money will be received from the backers. If the goal is achieved, the money gets transferred, and the creators can start working on the project. The backers might have to wait for several months, at times, to see the result.
How Can a Backer Fund a Project?
Backers can browse different projects on their homepage to find an idea and corresponding reward that suits them. There would be different categories, such as fresh ideas, ideas recommended because of previous choices, and more. You can go to a certain category and browse for projects under it. Once you find an interesting project, you simply have to click on the ‘Back this project’ button. There will be a list of amounts and rewards set up by the creator, and you can choose one of your conveniences.
You can go to the Estimated Delivery Date section on the page to find out when you will receive the rewards. Once the creator gets the necessary funding by the deadline, they can reach out to you to discuss further the delivery of the rewards. Note here that if you are paying through a credit card, it doesn’t get charged until the deadline set by the creator passes.
Kickstarter Fees Overview
It is essential for creators to be aware of the financial implications of using Kickstarter to fund a project. A platform fee of 5% is charged by Kickstarter.
Additionally, payment processing fees are charged at an hourly rate (USD$0.30) and a percentage of the transaction (USD$3).
These fees are payable by those who post their projects. Project organizers need to be aware of these costs when calculating the total budget of their Kickstarter campaign.
Recommended for reading: PERSONAL FINANCE FOR KIDS – WHAT YOU SHOULD KNOW?
Rewards
The success of a Kickstarter campaign is heavily dependent on its reward structure. This is because the platform operates on an “all or nothing” basis, meaning that project creators will not be paid until their project has achieved its funding goal. Therefore, offering incentives is essential to motivate backers and increase the likelihood of achieving the goal.
These incentives can range from experiences or tangible items to a genuine expression of appreciation, and the allure and estimated value of the benefits should be taken into consideration. Providing worthwhile rewards increases the likelihood of a successful Kickstarter campaign by attracting donors.
Marketing
Marketing your Kickstarter project effectively can be achieved through a variety of channels, such as social media and email marketing. Utilize the power of social media to increase awareness and engage your audience with captivating content and pertinent hashtags.
You can use email marketing to keep your mailing list up-to-date with project progress, creating a sense of connection and urgency among prospective backers. Pitch your project to media outlets, such as journalists and bloggers, to increase visibility.
Create a captivating press release and tailored pitches to capture the public’s attention, resulting in additional exposure.
A successful marketing strategy increases discoverability, making it more likely to attract backers. Through regular updates and engagement, a sense of community is created around your project, which encourages continued support.
Here are some of the most successful Kickstarter campaigns:
- The Oculus Rift is a virtual reality headset created by Oculus VR. In 2012, the Oculus Rift raised more than $2,400,000 on Kickstarter, surpassing its initial goal by more than 10 times. The Oculus Rift was released in 2016 and has been widely praised for its immersive virtual reality experience.
- Exploding Kittens, a card game designed by Elan Lee and illustrated by Matthew Inman and Shane Small, was one of the most successful Kickstarter campaigns of 2015, garnering an impressive $8.7M in pledges, more than doubling its initial goal. The game was praised for its humorous tone and straightforward gameplay, making it a hit among the gaming community.
- Pebble is a smartwatch developed by the company Pebble Technology. In 2012, the company raised more than $10 million on the crowdfunding platform Kickstarter, surpassing its original goal by more than 10 times. In 2013, the company released the Pebble smartwatch, which was praised for its long-lasting battery life and cost-effective pricing, establishing it as a prominent player in the market for smartwatches.
What Are Kickstarter’s Guidelines?
As mentioned earlier, there is a certain set of guidelines that the creators should know about before submitting a project on Kickstarter. These include:
- A creator can only receive the funds if they achieve the funding goal before the deadline they have set for the project. This all-or-nothing rule minimizes risks.
- If you don’t reach your funding goal on time, you will not receive the funds, but you can always try again in the future.
- You are not allowed to fundraise for a charity on Kickstarter.
- You are not allowed to offer equity on the platform.
- The idea you create should be something that can be shared with prospective clients.
- The presentation of your idea should be clear and precise.
- You are not allowed to raise funds for political or other contests.
- You are not allowed to involve prohibited items such as weapons, drugs, etc.
Some Ideas for A Successful Kickstarter Campaign
1. Keep Your Presentation Short Yet to The Point
Nobody has time or patience to go through long content today. If you want to impress backers to get funds, always keep the presentation easily legible and short.
2. Make It Customer-Centric
The endpoint is always the customer or client using your product or idea. So, it is important to show why your idea benefits the customer.
3. Choose A Favorable Launch Time
Again, this has everything to do with the customer and the market. Launching your idea when it best meets market needs will naturally double your chances of getting funded.
Conclusion
Kickstarter is one of the best and most popular crowdfunding platforms online through which you can make your dreams a reality. As a creator, you can reach out to the right group of people who share a similar mindset. As a backer, you can earn profit by funding a creator’s idea and helping its launch in the global market.
At the same time, it’s necessary to understand the Kickstarter guidelines and abide by them so that you can make the best out of the platform. Hope this helps!
Moonpreneur is on a mission to disrupt traditional education and future-proof the next generation with holistic learning solutions. Its Innovator Program is building tomorrow’s workforce by training students in AI/ML, Robotics, Coding, IoT, and Apps, enabling entrepreneurship through experiential learning.
Why do people back Kickstarter projects?
They could be driven by a fresh concept or just the satisfaction of finishing a task. For whatever reason, individuals fund projects in order to contribute to their realization. Supporting a project involves extending support for an innovative idea beyond merely giving money to the project developer.
Is it safe to support on Kickstarter?
It is Kickstarter’s responsibility to give our users a dependable and secure platform. This entails establishing clear rules for Kickstarter creators and backers and keeping an eye on our website to ensure that the guidelines are being followed.