Haven’t heard of Kickstarter? Well, it's time you did. Many innovative projects are now being funded by this crowdfunding platform. Highly successful campaigns include smart watches, games involving exploding kittens and movies.
Kickstarter has been around since 2009 and has facilitated the funding of more than 120,000 projects with nearly $3 billion from 12 million people. Let’s look at how they did it.
What makes Kickstarter a Fintech company?
The concept behind Kickstarter is simple. Artists, musicians, filmmakers, and other creators can gain money for their projects by attracting investors from the public. People can choose to invest a small amount for no return or they can pre-purchase rewards that will be available once the project is up and running. The instigator sets a funding goal and describes how they will get there via a video that is hosted on the Kickstarter site. If that goal is reached or exceeded, money is released and the project can get started. If it is not, no money is collected and the bid for funding fails.
What this means is much more complex. People are willing to fund innovation and creativity out of their own pockets. There is resistance to homogenous, pre-packaged production of artistic endeavour that currently prevails in popular culture. The implications of open source funding are far-reaching and unpredictable. The internet made the proliferation of information open source and we are still at the very early stages of understanding the ramifications. If parts of the financial system become entirely publically controlled, what happens next?
What about public opinion?
Public opinion of Kickstarter is mixed, mainly because of a general misunderstanding about the structure. People like its innovation and support of creatives who might not otherwise be able to manifest their visions. However, many investors think they are buying a guaranteed future reward. This isn’t the case. They are investing money in the hope of a promised reward if the project works and the relevant product is produced. This does not always happen, which has caused some backlash in reviews.
Overall Kickstarter is a great idea that no one would've believed could exist 10 years ago. It’s one of the leaders in crowdfunding and, arguably, one of the most well-known.