Kickstarter is one of the oldest and most popular crowdfunding platforms for creative and innovative projects to receive funding from people. Project creators set a goal amount and people who like the project proceed to fund the project. When the funding goal is reached, the project creator receives the full amount that they can then use to bring their projects to life.
Project creators must submit a project to the platform following important rules given here. Kickstarter vets every project. If a project is accepted, the creator can then proceed to launch the campaign for 30 days where people will pledge various amounts that could range from $10 to $1,000. Each pledged amount will have a certain reward or benefit to it. For instance, $10 pledges can receive a Thankyou token, while $1,000 pledges can earn rewards like early bird access to the project.
Kickstarter charges 5% commission fees of the total funding amount. For example, if your funding goal is $1,000, then Kickstarter makes $50. This is why, we always advise clients to make sure their funding goal takes into account Kickstarter fees, credit card fees and transaction fees. You can find the complete breakdown of fees and costs here.
To crowdfund on Kickstarter, you will need to have the initial prototype of your project ready. If you don’t have the prototype ready, you will atleast need to have high quality videos and images of the product. Furthermore, you will need to have a strong marketing plan that spans 6 months before the launch date. You will need to find backers. Without at least a 100 backers backing your project, you will find it hard to succeed with crowdfunding on Kickstarter.
Kickstarter is open for anyone who wants to fund new projects. There are no restrictions or limitations for being a backer.
Backers are people who fund Kickstarter projects. They could be friends and family members of the creator, or they could be investors. Any one can fund a project and be a backer.
Kickstarter backers are not customers. You can consider them as investors because they are investing in projects without any direct benefit other than receiving rewards. That said, there are a number of people who use Kickstarter as an ecommerce store where they become customers of innovative projects. This is quite beneficial for project creators who are looking to launch their products in the market for the first time and need the initial buzz or customer base.
A Kickstarter reward is the non-monetary benefit backers earn for pledging a certain amount. Rewards are up to creators to decide.
No. There is no specific policy for idea protection. You can however protect your idea using intellectual property protection laws. You will need to speak to your lawyers to get you a patent and a trademark for your project.
Anyone can apply for Kickstarter, but generally, only those projects with an interesting or exciting project can find success.
Kickstarter follows an All or Nothing model. This means you will get the pledged money only if you meet your funding goals. If you fall short of meeting your goals you will not receive any of the money pledged.
Although there is rarely any extra money, sometimes, some projects can get overfunded. If that happens, you can add enhancements to the product or offer additional services. Most creators also create stretch goals for these new features.
If you’re crowdfunding in the US or UK, then funds raised on Kickstarter are considered as income, therefore it is tax-deductible. Creators may also be able to classify certain funds raised on Kickstarter as a nontaxable gift, and not income. Speak to your tax accountant to determine how best to record Kickstarter funds given your campaign scenario. to find out whether you need to be paying income taxes, sales taxes, or a non-taxable gift.
If the project fails, you won’t receive any pledge money. You can relaunch the project as a new project with better images, videos, and start the process again.
You, the project creator or vendor. Kickstarter allows you to set up shipping by selecting the countries you plan on shipping to. If you intend on charging backers for shipment costs, be sure to mention it in your campaign.
Yes. Kickstarter is safe to start a crowdfunding project. Your project will be vetted by Kickstarter before going live. It’s hard to be scammed on Kickstarter.
Only in highly exceptional cases. Kickstarter requires you to have a prototype and high-quality images/videos of your product before launching a campaign.
Absolutely not. Unless you can find a couple of hundred backers on your own, there’s no chance you can succeed on Kickstarter without investment in marketing and PR.
Literally everywhere, on every medium. That said, it’s better to use a strategy to build email list of backers who will not only invest in your project but also become your first customers.
Your funding goal is the accumulation of your project manufacturing costs + shipment + Kickstarter fees + marketing costs etc. Ideally, your funding goal should be at least 5X of the original cost. For example, if it costs you $5,000 to make a product, your funding goal should at least be $25,000 to cover all the other costs.
Visit Kickstarter’s support page for additional information.