{"id":30976,"date":"2023-05-24T05:21:18","date_gmt":"2023-05-24T12:21:18","guid":{"rendered":"https:\/\/alejandrorioja.com\/?p=30976"},"modified":"2023-10-25T01:10:51","modified_gmt":"2023-10-25T08:10:51","slug":"how-does-kickstarter-work-make-money","status":"publish","type":"post","link":"https:\/\/alejandrorioja.com\/how-does-kickstarter-work-make-money\/","title":{"rendered":"Kickstarter Unveiled: How The Platform Generates Revenue"},"content":{"rendered":"\n<div class=\"wp-block-uagb-inline-notice uagb-inline_notice__align-left uagb-block-e9c7b210\"><h4 class=\"uagb-notice-title\">Summary<\/h4><div class=\"uagb-notice-text\">Kickstarter is an online platform that enables creative projects to raise funds from the public. The site offers creators various services, including profiles, project pages, and updates.\u00a0<br><br>As an entrepreneur, I understand the struggle of finding funding for your ideas and the importance of getting an audience to help you get started. This is where platforms like Kickstarter come in!<br><br>Entrepreneurs can also access funding mechanisms such as fixed reward levels, pay-it-forward options, advanced analytics tools, and payment processing integration with major credit cards. Kickstarter has worked with over one million projects in over one hundred countries since its founding in 2009.<\/div><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">What is Kickstarter?<\/h2>\n\n\n\n<p>Kickstarter is a <a href=\"https:\/\/www.forbes.com\/sites\/nealtaparia\/2020\/08\/26\/how-to-use-kickstarter-as-your-secret-weapon\/?sh=bc9b4781539d\" target=\"_blank\" rel=\"noreferrer noopener\">crowdfunding platform<\/a> where the public can support creative projects. It&#8217;s not just for developers and app creators; you can use it to fund any project, from musicians to filmmakers and designers.\u00a0<\/p>\n\n\n\n<p>It&#8217;s a public benefit organization headquartered in Brooklyn, well known for its crowdsourcing platform. Kickstarter was established in 2009 to assist in realizing creative ideas by Perry Chen, Yancey Strickler, and Charles Adler.&nbsp;<\/p>\n\n\n\n<p>This indicates that various creatives use the platform, including musicians, filmmakers, comedians, journalists, and gamers. The platform has launched over 500,000 projects totaling $5.4 billion as of November 2020.<\/p>\n\n\n\n<p>The idea behind Kickstarter is that if you want something done but don&#8217;t have the money yourself, you can crowdsource the funds by asking for donations from thousands of people online.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<div class=\"flex-video widescreen youtube\"><iframe loading=\"lazy\" title=\"How Kickstarter Works\" width=\"1170\" height=\"658\" src=\"https:\/\/www.youtube.com\/embed\/FrCCc-SKxqk?feature=oembed&showinfo=0&rel=0&modestbranding=1&iv_load_policy=3&playsinline=1&enablejsapi=1\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" allowfullscreen><\/iframe><\/div>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">How Kickstarter Works<\/h2>\n\n\n\n<p>Kickstarter works by allowing people or businesses to create accounts on their site, then set up campaigns that describe what they need money for (called &#8220;projects&#8221;).&nbsp;<\/p>\n\n\n\n<p>With a predetermined financial target, the creators post their projects on the platform. They describe every aspect of their proposal in text, photographs, and videos and even list the benefits backers will receive if they support it. It&#8217;s like Amazon but for art and design projects.&nbsp;<\/p>\n\n\n\n<p>The site lets you look at the projects and decide if you want to help them. If a project reaches its goal, it is funded, and the backers who support it receive incentives. The rewards can be broken into tiers, with high levels of support leading to higher payouts. People who support innovative ideas do so voluntarily or for the benefits they receive.&nbsp;<\/p>\n\n\n\n<p>Financial support is provided, and the benefits are determined by the amount of money pledged. When the funding target has been met, the amount backers pledged is charged to their credit cards, and creators receive the money. The goodies promised to the backers are delivered.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Revenue Generation<\/h2>\n\n\n\n<p>It uses a <a href=\"https:\/\/www.forbes.com\/sites\/tanyaprive\/2012\/10\/12\/top-10-benefits-of-crowdfunding-2\/?sh=742872902c5e\" target=\"_blank\" rel=\"noreferrer noopener\">funding model<\/a> known as all-or-nothing. This implies that neither the creator nor its backers receive any money if the project&#8217;s financing goal is not reached. As a result, the business argues that this model generates more revenue for Kickstarter and the creator. Financial objectives inspire collaboration among creators and backers, instilling urgency.<\/p>\n\n\n\n<p>A sense of community is created when both parties successfully fund a project and cross the finish line together. Kickstarter does not charge a fee for failed projects; the money is returned to the backers.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How Does Kickstarter Make Money?<\/h2>\n\n\n\n<p>A portion of the funds earned for particular projects on the fundraising platform goes to Kickstarter as revenue. Users can post projects that need funding thanks to Kickstarter&#8217;s business strategy.<\/p>\n\n\n\n<p>These projects must reach a predefined level for the money to be transferred from the donors to the creators. Kickstarter retains 5% of the total funds raised for a project if funding reaches or exceeds the designated donation level.&nbsp;<\/p>\n\n\n\n<p>None of the parties involved will contribute or receive funds if a project falls short of its financing goal. The majority of <a href=\"https:\/\/www.businessinsider.com\/kickstarter-revenue-2010-10\" target=\"_blank\" rel=\"noreferrer noopener\">Kickstarter&#8217;s revenue<\/a> is obtained through this technique. Processing charges are another revenue stream for Kickstarter. Kickstarter deducts a 3% processing charge from the money raised by its creators and an additional $0.20 per pledge of funding.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Areas Of Operation<\/h2>\n\n\n\n<p>Fortunately, the platform is available worldwide, so well-wishers can contribute, regardless of where they are. The only requirement is that they have working credit cards and verified Kickstarter accounts.&nbsp;<\/p>\n\n\n\n<p>For creators, however, the supported addresses include the US, UK, Canada, Australia, New Zealand, Netherlands, and more than ten countries.<\/p>\n\n\n\n<p>Before getting verified, your address will be checked and must fall under the covered countries. If you&#8217;re trying to raise funds for a specific entity or nonprofit, you&#8217;ll be expected to launch the project within the same country as that listed for the entity.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Services Offered&nbsp;<\/h2>\n\n\n\n<p>Not all services are available for every idea. One of the offered services is providing a marketing platform for your idea. Social platforms, for example, can direct attention to any potential business idea or creative project. By providing unified platforms, funding backers can support a project&#8217;s efforts to bring an idea to life.&nbsp;<\/p>\n\n\n\n<p>In return, the creators offer certain rewards to backers, including a copy of the final product. Kickstarter isn&#8217;t a disconnected store that supports haphazard funding. It&#8217;s set up to ensure that only those projects that have received enough support can access the pledged funds.&nbsp;<\/p>\n\n\n\n<p>So, unless the project reaches its funding goal, Kickstarter doesn&#8217;t charge anything. Only when the venture has been subsidized effectively does Kickstarter charge an expensive fee.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Business Model<\/h2>\n\n\n\n<p>Kickstarter&#8217;s business model is multifaceted. Its structure is planned so that the company generates revenue from fees cut from the successfully pledged projects as commission fees.<\/p>\n\n\n\n<p>In general, most of Kickstarter&#8217;s advertising is conducted on social media. This allows the public to share the projects they believe in with friends and spread the word. Meeting well-wishers this way makes this <a href=\"https:\/\/alejandrorioja.com\/growth-marketing-strategies-guide\/\" target=\"_blank\" rel=\"noreferrer noopener\">marketing strategy<\/a> more effective!<\/p>\n\n\n\n<p>If people see a project they want to donate to, they can access their Kickstarter accounts, where the rest of the funding and tracking happens.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Operating Model<\/h2>\n\n\n\n<p>The following terms must be understood to comprehend Kickstarter&#8217;s operating model or operation:&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Creators:&nbsp;<\/h3>\n\n\n\n<p>Individuals or groups with products or concepts who post on the website and launch a Kickstarter Campaign to raise funds for their endeavors. They can risk-free pitch an idea for a project through Kickstarter. If they don&#8217;t get full financing, they continue. If successful, they can claim all the money they need to finish the project.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Backers:&nbsp;<\/h3>\n\n\n\n<p>When they see a project worth investing in, they are the people who pledge their money. They are the people to whom the creators must appeal. They either voluntarily support the product or look for returns from them. Free goodies, discounts, invitations to events, and other incentives are all examples of returns.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Project<strong>:<\/strong>&nbsp;<\/h3>\n\n\n\n<p>A &#8220;project&#8221; refers to the novel concept for which the hopeful creators present and need funding. To succeed, the campaign must have a clear goal backers can support.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The goal for Funding<strong>:<\/strong>&nbsp;<\/h3>\n\n\n\n<p>It&#8217;s how much cash the makers need to finish their task. Every Kickstarter project has a predetermined funding target. The maker gets the cash solely after the venture comes to or surpasses its subsidizing objectives. Similarly, backers&#8217; credit cards are only debited once the project is fully funded.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Rewards<strong>:<\/strong>&nbsp;<\/h3>\n\n\n\n<p>These are the goodies that the creatives offer to backers in exchange for their support. It could be one-of-a-kind experiences, limited editions, or creative work being made.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Risks<\/h2>\n\n\n\n<p>Kickstarter is a great way to raise money for your project, but it comes with <a href=\"https:\/\/alejandrorioja.com\/what-are-the-different-types-of-compliance-risks-here-is-what-you-need-to-know\/\" target=\"_blank\" rel=\"noreferrer noopener\">risks like any other business venture<\/a>. You can&#8217;t control the success of your campaign or how much money you&#8217;ll make once it&#8217;s over. However, the supporters and innovators behind the proposals run less of a risk under this system.\u00a0<\/p>\n\n\n\n<p>Kickstarter holds the pledged fees until the financial goal is met before being released to the project makers. That way, they get their money back if the project isn&#8217;t a success. However, just like the creators, if the project doesn&#8217;t take off even after getting enough funding, they&#8217;ll have invested their money for nothing.\u00a0<\/p>\n\n\n\n<p>The creative parties can discover that they require more money than originally anticipated. And even if they get the money they requested, they may still have unfinished plans or projects and cannot return the money to their backers. Some things can be done to reduce the risk of running and failing.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Target Audience&nbsp;<\/h2>\n\n\n\n<p>Because anyone interested in supporting a project can become a member of Kickstarter, the platform does not have a <a href=\"https:\/\/alejandrorioja.com\/the-definitive-guide-to-crafting-a-professional-press-kit-for-your-business\/\" target=\"_blank\" rel=\"noreferrer noopener\">specific target audience<\/a>. The target demographic for Kickstarter indicates that 78% of its users are men and 22% are women.\u00a0<\/p>\n\n\n\n<p>Most users of Kickstarter are between the ages of 25 and 35. Because they would generate funding, the creators who share their ideas require an audience. With the assistance of conduct focusing, one can interface with genuine individuals.<\/p>\n\n\n\n<p>These individuals with whom you can get associated are the ones who have upheld projects like yours. Through advertisements, your Kickstarter project will recommend others who have backed similar projects for you to connect with them. One of Kickstarter&#8217;s most common forms of marketing is behavioral targeting.&nbsp;<\/p>\n\n\n\n<p>Therefore, if you have an imaginative concept, you might get support from someone who shares your interests. As previously stated, Kickstarter has provided funding for more than 200,000 projects.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Payment Methods&nbsp;<\/h2>\n\n\n\n<p>Both backers and creatives must have active credit or debit cards like VISA or MasterCards, JCB, UnionPay, Discover, or American Express. Unfortunately, PayPal payments aren&#8217;t accepted for now.&nbsp;<\/p>\n\n\n\n<p>Pledgers are advised to ensure their accounts have a minimum of $1 (or the equivalent in whatever currency) above the amount they&#8217;ll pledge. This helps ensure there won&#8217;t be problems when debiting your pledge amount.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Fund Your Dreams With Kickstarter<\/h2>\n\n\n\n<p>Crowdfunding has become a popular way for startups and established brands to raise money from investors and supporters. That&#8217;s why platforms like Kickstarter are great for creators to get their projects off the ground. Whether you&#8217;re a beginner or an established creative, Kickstarter is reliable for various projects, connecting you with well-wishers who can finance your dreams!<\/p>\n\n\n\n<p>You can easily start today even if you don&#8217;t have a successful Kickstarter campaign. Kickstarter provides a platform that will hopefully allow you to build up your audience over time and ultimately get your products or services in the public eye!<\/p>\n\n\n\n<p>If you found this article insightful, here are more resources you can use to learn more about crowdfunding as an entrepreneur:<\/p>\n\n\n\n<ul>\n<li><a href=\"https:\/\/alejandrorioja.com\/kickstarter-vs-indiegogo\/\" target=\"_blank\" rel=\"noreferrer noopener\">Finding The Best Crowdfunding Platform: Kickstarter Vs. Indiegogo<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/alejandrorioja.com\/best-fiverr-gigs\/\" target=\"_blank\" rel=\"noreferrer noopener\">26 Best Fiverr Gigs Of 2023 To Grow Your Business<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/alejandrorioja.com\/how-to-become-an-entrepreneur\/\" target=\"_blank\" rel=\"noreferrer noopener\">Guide to Becoming an Entrepreneur: Useful Tips<\/a><\/li>\n<\/ul>\n\n\n\n<p>Let me know in the comments section what other crowdfunding tips you want me to discuss!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is Kickstarter? Kickstarter is a crowdfunding platform where the public can support creative projects. It&#8217;s not just for developers and app creators; you can use it to fund any project, from musicians to filmmakers and designers.\u00a0 It&#8217;s a public benefit organization headquartered in Brooklyn, well known for its crowdsourcing platform. Kickstarter was established in&hellip;<\/p>\n","protected":false},"author":1,"featured_media":30978,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","om_disable_all_campaigns":false,"_uag_custom_page_level_css":"","footnotes":""},"categories":[649],"tags":[],"lang":"en","translations":{"en":30976},"uagb_featured_image_src":{"full":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue.png",1200,675,false],"thumbnail":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue.png",128,72,false],"medium":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue.png",1200,675,false],"medium_large":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-768x432.png",768,432,true],"large":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue.png",1200,675,false],"1536x1536":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue.png",1200,675,false],"2048x2048":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue.png",1200,675,false],"post-thumbnail":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-80x75.png",80,75,true],"goodlife-thumbnail":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-80x75.png",80,75,true],"goodlife-grid":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-320x270.png",320,270,true],"goodlife-latest":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-320x225.png",320,225,true],"goodlife-latestshort":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-320x170.png",320,170,true],"goodlife-vertical":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-320x420.png",320,420,true],"goodlife-gallery":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-320x150.png",320,150,true],"goodlife-galleryvertical":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-320x350.png",320,350,true],"goodlife-poststyle1":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-770x433.png",770,433,true],"goodlife-thumbnail-small":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-40x150.png",40,150,true],"goodlife-thumbnail-2x":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-160x150.png",160,150,true],"goodlife-thumbnail-mini":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-20x18.png",20,18,true],"goodlife-grid-small":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-160x540.png",160,540,true],"goodlife-grid-2x":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-640x540.png",640,540,true],"goodlife-grid-mini":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-20x16.png",20,16,true],"goodlife-latest-small":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-160x450.png",160,450,true],"goodlife-latest-2x":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-640x450.png",640,450,true],"goodlife-latest-mini":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-20x14.png",20,14,true],"goodlife-latestshort-small":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-160x340.png",160,340,true],"goodlife-latestshort-2x":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Generates-Revenue-640x340.png",640,340,true],"goodlife-latestshort-mini":["https:\/\/alejandrorioja.com\/wp-content\/uploads\/2023\/05\/Kickstarter-Unveiled-How-The-Platform-Gen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Rioja","author_link":"https:\/\/alejandrorioja.com\/author\/alerioja\/"},"uagb_comment_info":0,"uagb_excerpt":"What is Kickstarter? Kickstarter is a crowdfunding platform where the public can support creative projects. It&#8217;s not just for developers and app creators; you can use it to fund any project, from musicians to filmmakers and designers.\u00a0 It&#8217;s a public benefit organization headquartered in Brooklyn, well known for its crowdsourcing platform. Kickstarter was established in&hellip;","pll_sync_post":[],"_links":{"self":[{"href":"https:\/\/alejandrorioja.com\/wp-json\/wp\/v2\/posts\/30976"}],"collection":[{"href":"https:\/\/alejandrorioja.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/alejandrorioja.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/alejandrorioja.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/alejandrorioja.com\/wp-json\/wp\/v2\/comments?post=30976"}],"version-history":[{"count":1,"href":"https:\/\/alejandrorioja.com\/wp-json\/wp\/v2\/posts\/30976\/revisions"}],"predecessor-version":[{"id":30979,"href":"https:\/\/alejandrorioja.com\/wp-json\/wp\/v2\/posts\/30976\/revisions\/30979"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/alejandrorioja.com\/wp-json\/wp\/v2\/media\/30978"}],"wp:attachment":[{"href":"https:\/\/alejandrorioja.com\/wp-json\/wp\/v2\/media?parent=30976"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/alejandrorioja.com\/wp-json\/wp\/v2\/categories?post=30976"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alejandrorioja.com\/wp-json\/wp\/v2\/tags?post=30976"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}