Kickstarter is a company that was started in 2009 by Perry Chen, Yancey Strickler, and Charles Adler as a way to fund projects. The projects can be anything from video games to car parts. If you need money to build or start something you can always see if Kickstarter will help you out.
The way the funding works is that say I want to create a video game, and I need $500,000 to make it happen. Then I would ask for that and say what my game is about, when it will be done, and whatnot, but I would also have reward tiers, so say you give me $20 then I will give you a copy of the game, or at $35 I will give you the game and a T-Shirt. Some projects like to say that you are investing, but that is not the case. You are giving money to these people so that they can make something you want. I guess as rewards they could give you stock or something, but I am pretty sure that would get Kickstarter in trouble for unregulated stock trading.
Kickstarter has come under fire lately because some high profile projects have collapsed, or been proven to be frauds. Kickstarter does have it in the terms of use that if you cannot create what you said you would that you have to give the money back, but it does not give a timeline, and there is no real enforcement, so there is a bit of buyer beware.
I still feel that Kickstarter is fun and worthwhile, but like with all things in life do it with moderation, and I have put together my tips for using the site.
Don’t Kickstart a project with money you don’t have: It seems obvious but when projects fail it is the biggest complaint that people funded the project with money they didn’t have, now they are getting nothing.
Expect delays: Most of the people on Kickstarter have never run a business or funded a product before, so it can take some time to work things out, but usually they pull it out, just later then they said they would.
Remember that you are pre-ordering not investing: People like to rant and rave when a decision is made that goes counter to what they want, but they aren’t investors, so they should calm down and see how it turns out.
I totally think people should use Kickstarter to help other people accomplish their dreams, but just be careful and look in to what you are Kickstarting.
