Kickstarter: The Science of Crowdfunding

KICKSTARTER: The Science of Crowdfunding SS$$$$S$SSSSSSSSSSSSSSSS There are many ways to make money online, but Kickstarter has taken things to a whole new level using a technique called "Crowdfunding". Through Kickstarter, artists can raise funding for a variety of projects by asking for pledges from the Kickstarter community. While some only make hundreds, others have raised millions using the Kickstarter community to fund their projects. So what's the story behind Kickstarter and Crowdfunding, how does it work, and most importantly... does it work? How It Works History of Crowdfunding STEP 1 ARTIST WITH AN IDEA 1997 An artist brings an idea/project to the Kickstarter team, and if approved, can KICKSTARTER TEAM The idea of crowdfunding began in the music industry when American setup a project page. fans underwrote an entire US tour of the British group Marillion. They raised $60,000 through a donation driven internet campaign. steven taylor who needed his film financed, received 276% more than he requested. 2004 the original team: perry chen, yancey strickler, and charles adler. The French film "Demain la Veille WHICH (Waiting for Yesterday)" raised $50,000 in 3 weeks through online crowdfunding. (most successful kikstarter campaign in hisotry) CATEGORY? STEP 2 The project must fit into at least 1 of 15 categories: Art, Comedy, Comics, Dance, Design, 2005 Fashion, Food, Film & Video, Games, Journalism, Music, Photography, Technology, Theater, or Writing & Publishing. The term "Micropatronage" was made popular by blogger Jason Kottke, who quit his job for a year category: technology the TikTok+LunaTik watch kits campaign requested $15,000 and raised and relied on small donations from thousands of readers to his blog. $941,718, very successful! 2006 August 12, 2006 The term "Crowdfunding" was coined by Michael Sullivan stating: "Many things are important factors, but funding from the 'crowd' is the base of which all RAISE MONEY FOR YOUR PROJECT STEP 3- else depends on and is built on. So, Crowdfunding is an accurate term to help me explain this core element of fundavlog." The project owner must set a goal amount and deadline for reaching the goal, and if they receive enough pledges to meet the goal, then they keep the money, but if they don't meet the goal, they don't get any money and pledgers are not charged. This is called "all or nothing funding" or a "threshold pledge system." SET GOALS! 2009 Successful filmmaking, Diaspora: Filmmakers raised $200,641 whicch was 2006% more than their initial request for $10,000. Perry Chen, Yancey Strickler, and Charles Adler begin Kickstarter in Manhattan's Lower East Side. BACKERS 2010 $3,265 PLEDGED OF $3,000 GOAL April 16, 2010 The Miami New Times calls Kickstarter "one of the smartest ideas for a website since Al Gore invented the Internet." STEP 4 Gif creators Tom Gerhardt and Dan Provost raised $134,417 which was 1378% more than their goal of $9750 and in return gave investors free Glifs and bought dinner for those in NYC. SET REWARDS The project owner sets rewards for various pledge levels, this encourages the community to sponsor various amounts based on the reward they want. STEP 6 The project enters the Kickstarter community. ENTER THE COMMUNITY STEP 5 The project owner creates a video to showcase their project and prove that they are who they say they are. A successful entry Scott Thomas, the SHOWCASE YOUR PROJECT design director of the Obama campaign, produced a book that chronicles of art DVD and design from the historic campaign. Lockpicks by Open Locksport creator Schuyler Towne showcased his easy to use custom made lockpicks, and how they were a littHe different from what was already out on the market. RECEIVE THE FUNDS STEP 8- UPDATE YOUR STEP 7« INVESTORS If the project owner meets or exceeds their goal, they receive all the funds minus 5% which goes to Kickstarter and 3-5% which goes to Amazon IF they are using Amazon payments to receive money. Throughout the project, the project owner must include updates to keep their investors posted on how things are going. amazonpayments“ %24 Successful Campaigns The Museopen campaign, which alerted investors on how to provide copyright free music content, explained how their donations would be used purchase and relkase music to the public domain. These campaigns mentioned above have earned Kickstarter 5% of $1,863,147.00 Quick Facts: Kickstarter averages 1.1M visitors/month Kickstarter demographics by age: 0-17 1% 18-24 8% 25-34 35-44 27% 35% 45-54 55-64 16% 10% 65+ 2% Sources: http://en.wikipedia.org/wiki/Crowd_funding http://en.wikipedia.org/wiki/Kickstarter https://www.kickstarter.com/help/faq https://www.google.com/adplanner/planning/site_profile?hl =en#siteDetails?identifier=kickstarter.com&lp=true Kle designed by nfographics brought to you by zippycart