Before is used, and they need to give

Before Kickstarter came about for companies and
projects that needed to gain capital had to either get private funding, this
could be individual funding, corporate funding or friends giving money. Another
way of raising funds is through funding programmes like government and
statutory funding or trust and foundations. Kickstarter has revolutionised the
world of crowdfunding, it doesn’t just raise funds for projects it helps
advertise and

In 2014, Kickstarter tried to make itself sustainable
to any loopholes. The site put in new guidelines for those who want to post on
the website. Projects must meet some basic criteria, they need to have clear
goals, have a plan for encountering setbacks and have estimated completion
date. When a company can’t deliver the creators are expected to explain what is
going on and how the money is used, and they need to give refunds to any
backers who request them. In the terms and conditions Kickstarter states that
when giving refunds, backers can “explain how the funds will be used to
complete the project in some alternate form” this provides a loophole for
creators to keep a project going but backers can cancel their investment at any
time during funding but after the goal has been met by the creator, Kickstarter
is no longer involved with processing any refunds the interaction must happen
between the backer and the creator. The government have no intervention in the
business.

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The process for raising funds on Kickstarter is very
simple. So most creative people who have ideas lack certain resources. The
creators post their projects and ideas along with specification for the
finished product, potential risks and process updates then other people can
donate money towards these projects. The creators set a monetary goal and
deadline for when they want to raise this money then supports pledge money
towards the projects. If the goal is not met by the deadline set, the creator
receives no money and the supports don’t lose any of their money. The creators
also give away certain prizes/ rewards if you donate a certain amount. The most
popular product funded on Kickstarter was “Pebble time’ it was a colour e-paper
smartwatch with up to 7 days of battery. 78,471 backers pledged $20,338.986,
they originally asked for $500,000 but got forty million times more than that.
Pebble was one of the first smartwatches that worked with most phones. Pebble
is currently worth $ 40 million. (Stark, 2018) which
is not much compared to brands like Fitbit. Pebbles downfall was due to them
having too many product, too many choices, too many price points. Even though
it was the most popular/funded project on Kickstarter it helps shows how a bad
business model can ruin an enterprise. Despite
the fact pebble had raised the most funds through kickstart it seems that
business with new ways of doing thing seem to be more popular when it comes to
lasting after there original “kickstart”. 
The magic of crowdfunding is that unlimited funds can be raised in any
time set. A card game called “Exploding Kittens’ was 100% funded in 20 minutes
and 1000% funded is less than an hour. It raised $3 million in 72 hours.
(Feloni., 2015). When your project is successfully funded, the following fees
will be collected from the funding total, Kickstarter will take 5% of the fee
and payment processing fees which is between 3% to 5%.

Kickstarter is the largest funding platform around. It
began in 2009 with a premise that sometimes fans will be willing to pay in
advance to make a project happen. It was started by a three men, Perry Chen,
Charles Adler and Yancey Strickler. Perry Chen is the principle founder of
Kickstarter. Chen was raised in New York city by both his parents, He went to
Tulane university in New Orleans, he then went on to receive degree in 1998. He
worked many jobs but in 2009 he founded and launched Kickstarter. (Rafferty, 2018) In 2009 the total amount of
pledged per year for successful projects grew from $1,580,2027 to $615,341,591
in 2015 but in 2016 it took a slight drop around $35,000,000 (BIDAUX, 2018).
The drop-in projects funded could have been down to there being more competition
in the crowdfunding market or it could have been to there not being a big
interest in new technology or art etc.

The largest out of the four that make up the world of
crowdfunding is reward-based, this is due to two big players: Kickstarter and
Indiegogo.

Crowdfunding is a mixture of crowdsources and
microfinance, it brings several people together who devote money to companies
and projects they want to support. There are a few types of different types of
crowdfunding, there is reward-based where people pledge money to new technology
in development, different art and even music artist producing a new album. The
second type is peer-to-peer lending which is when people are willing to give
out money to other people like a bank loan. The third type is donation-based is
where small loans are given to local entrepreneurs to help finance different
parts of the business. The fourth and last type is equity crowdfunding, it allows
real investment into establishments.