Kickstarter is driven by creators and backers. Creators present creative project ideas, and backers fund those projects.
Creators set up a page to display their project's details and prototypes using text, video, and photos. Project creators set a funding goal and a deadline. The creators also create reward levels for backers who pledge specific amounts. The more a backer pledges, the bigger the reward.
When enough backers have funded the project, the creator can develop and produce their vision. Depending on the project's complexity, backers may have to wait months to see the finished product.
Creators cannot promise backers any stake in the business, such as revenue sharing and equity.
Starting a Kickstarter Project
Although Kickstarter is a great platform for exposure, not everyone gets their projects approved. Every creator must first review the Kickstarter Project Guidelines before submitting a project. Kickstarter accepts about 75 percent of submitted projects. The remaining 25 percent are turned away, usually due to non-compliance with the guidelines.
Some of Kickstarter's key general rules for creators say the creator must:
- Create something that can be shared with others.
- Be honest and clearly present their project.
- Not fundraise for charity.
- Not offer equity.
- Not involve prohibited items, including contests, political fundraising, drugs, weapons, and more.
- While many projects fall into the tech category, Kickstarter is a place for creators of all kinds, including filmmakers, artists, musicians, designers, writers, illustrators, explorers, curators, performers, and other creative individuals.
Kickstarter's All or Nothing Rule
A creator can collect their funds only if they reach their funding goal by the deadline. If they don't reach the goal in time, no money changes hands.
Kickstarter put this rule in place to minimize risk. If a project can't generate enough funds and can't deliver to current backers when creators didn't raise enough money, it can be tough on everyone. Creators can always try again at a later time.
They charge a flat 5% fee on the total amount raised.
There's then a payment processing fee of 3% plus $0.20 per pledge.