Kickstarter is a crowdfunding platform. It is a way for businesses to raise finance for a particular project.
Why Kickstarter Differs
There are loads of platforms out there to raise finance for your business, however Kickstarter is very different from other platforms. I will try and show how.
Your Investors Don’t Want Their Money Back
You may want to read that again. Investors do not want the money they invest in your business back.
This is the first thing to try and get your head around with Kickstarter.
The rules of Kickstarter state that you cannot offer a financial reward for investment. Instead you need to give something unique away, something not otherwise available. It is very ego based.
There are a lot of creative ideas on Kickstarter. Take a company making a video game. They may offer a reward to their investors which looks something like;
- Invest £100 and we will send you the game a week early
- Invest £500 get the above, and we will name a character in the game after you
- Invest £1000 get all the above, and we will bring you into the studio, invite you to the launch party and put you in the game credits
As you can see, it is about offering something unique that money cannot buy. Investors can watch others play the game and claim a part of the credit.
Kickstarter Don’t Fund Businesses
Another line to read again. Kickstarter do not fund businesses, they fund projects. Because of how investors are rewarded then there needs to be a start, product and end. The project cannot be a going concern.
Businesses can use Kickstarter to launch a new product, but cannot use the platform to raise working capital or expansion finance.
For this reason there are a lot of creative industries on Kickstarter, they are easy to identify as projects whether that be a film, game, new product etc. The whole platform works well with creatives, the approach, offering something different as a reward, the concept of a new idea, it all works well with creatively minded people.
If you want to see more about Kickstarter then have a look at their video below. I really like the platform as it is a little different, not for everyone but it does offer some businesses a good option, take a look around Kickstarter here.
By David Farmer
If you have any comments to add to this post then please leave them below, or contact Lime Consultancy here.
Kickstarter is a crowdfunding platform for projects and non-financial reward. 90 second video from Kickstarter covering projects they love