Kickstarter
Kickstarter is a public-benefit corporation founded in 2009 in Brooklyn, New York, that facilitates crowdfunding for creative projects. The platform allows individuals, often referred to as creators, to present their projects to the public, who can then contribute funds, usually in small amounts. This all-or-nothing model means that projects must reach their funding goals within a set timeframe to receive any money, while unsuccessful campaigns incur no charges for backers. Since its inception, Kickstarter has gained significant traction, funding over 107,000 projects and raising more than $2 billion by June 2016.
The types of projects funded range widely, including art, technology, and film, with notable success stories such as the Pebble smartwatch and the Reading Rainbow app expansion. While the platform has a reported success rate of around 40%, many projects still find the experience rewarding, with a small percentage facing issues with fulfillment. Kickstarter's unique appeal lies in its community-driven approach, where backers receive various incentives for their contributions, fostering a sense of shared investment in the creative process. As a company that balances profit with social responsibility, Kickstarter exemplifies a modern approach to supporting artistic endeavors.
On this Page
Subject Terms
Kickstarter
Company Information
- Date founded: 2009
- Industry: Finance
- Corporate headquarters: Brooklyn, New York
- Type: Public
Kickstarter, founded by Perry Chen, Yancey Strickler, and Charles Adler in 2009, is an American public-benefit corporation that uses crowdfunding to support creative projects. "Crowdfunding," as the term is used in the twenty-first century, is the funding of a project through contributions, usually in small amounts, from members of the public. In 1997, a British rock band funded a reunion tour through online donations from fans and became the first known example of modern crowdfunding. Others thought the idea was a good one, and in 2000, the crowdfunding industry began. Kickstarter emerged as a star within its first few years. Two years after the platform’s launch, artists, filmmakers, musicians, writers and designers had used Kickstarter for 10,626 projects involving 813,205 contributors who had given a total of $75 million. By 2024, Brooklyn-based Kickstarter had truly gone global, available to creators in twenty-five countries.
Brief History
Perry Chen was living in New Orleans in 2001–02 when the wish to host a Kruder & Dorfmeister concert as part of the city’s annual Jazz Fest struck him. Lacking the means to realize his wish, he imagined a system that would allow potential audience members to give money to support the concert. The festival passed without the concert, but the idea for funding stayed with Chen. By the time he moved to New York and met Yancey Strickler in 2005, his enthusiasm for the idea had grown. With Strickler’s help, the idea moved to the whiteboard stage, with a rough design and a name—Kickstartr (without the e). But neither Chen, whose work history ranged from a stint as a preschool teacher to time as a gallerist, nor Strickler, a rock critic and writer, had the skills to move beyond the sketch. In 2007, Charles Adler, a designer, joined them, and with his expertise, the project progressed to wireframes and sketches. With assistance from others, the site officially launched as Kickstarter (with the e) on April 28, 2009.
By May 1, Kickstarter had their first successfully funded project: three backers funded Drawing for Dollars, a project in which an artist requested money to draw a picture in exchange for prints of the finished project, for a total of $35. Three weeks after the launch, Allison Weiss, a singer-songwriter from Georgia, used Kickstarter to raise funds for her first studio album, Allison Weiss Was Right All Along. She reached her goal the first day and tripled it a few days later. Weiss and Kickstarter attracted major media attention, and the company was on its way up. By Kickstarter’s third anniversary, more than $200 million had been pledged to projects.
On January 1, 2014, Chen stepped down as CEO of the company, becoming its chair instead, and Strickler became Kickstarter’s second CEO. At the same time, Adler resigned as head of design to become an adviser. Pundits predicted trouble, but the company continued to prosper. Before the end of the fifth year, pledges had reached $1 billion and, less than two years later, topped $2 billion. On September 21, 2015, Strickler, Chen, and Adler announced that Kickstarter was transitioning to a public benefit corporation (PBC). Companies that choose this option fall somewhere between a traditional for-profit corporation and a nonprofit. They have a legal responsibility to actively promote the social good. Prior to the announcement, Kickstarter erased the dollar amount from its most-funded list to focus on the size of the communities the company has created. According to the Kickstarter website, as of January 2025, almost 24 million backers have successfully funded 271,944 projects. Critics point to Kickstarter’s low (41 percent) success rate, but Strickler points out that Kickstarter is a meritocracy. Few successful projects become problems for the company and its backers. One study reported that only 3.6 percent of creators were forced to issue refunds or left backers wondering what happened to the final product.
Overview
From the beginning, Kickstarter has operated under an all-or-nothing policy. The process is simple. The creator of a project in one of fifteen categories posts a description of the project on Kickstarter. Although the company does not require a pitch video, most successful projects have one. A funding goal with a time frame is set. Sixty days is the maximum, with thirty the average. The Kickstarter staff members (336 people, as of January 2025) consider the project and approve or reject it. Approved projects are posted on the site. If the project fails to reach 100 percent of its goal within the specified time frame, no charges are made against backers’ credit cards. If the project is funded, Kickstarter gets 5 percent, and another small percentage goes to the payment provider (Amazon until 2015, when Kickstarter switched to Stripe). Kickstarter does not allow projects to raise funds for charity, offer financial incentives, or involve items that are illegal, dangerous, heavily regulated, or the intellectual property of someone other than the project creator. Tiered incentives for backers are also part of Kickstarter projects. Incentives range from onscreen acknowledgements and t-shirts at the low end to copies of the product or personal visits with the creator for more substantial contributions. The average individual contribution is $25.
Media attention has focused on the most successful projects in terms of dollars raised. For example, Pebble Technology launched a Kickstarter campaign in 000000002012-04-11-0000April 2012 for its first-generation smartwatch, with an initial goal of $100,000. That goal was reached within two hours, and in less than a week, pledges totaled almost $5 million. When the campaign ended on May 18, 2012, Pebble had raised more than $10 million and had become the most-funded project in the history of Kickstarter as of that date. Pebble returned to Kickstarter in 2015 and again in 2016 for two more highly successful campaigns. Film and video projects have also experienced some high-profile success. LeVar Burton’s 2014 campaign to expand the Reading Rainbow app to mobile platforms was particularly popular, with 105,857 backers pledging more than $5.4 million. In 2015, a documentary profiling Bill Nye, the Science Guy, became the highest-funded documentary film in YPERLINK "http://deadline.com/tag/kickstarter/" Kickstarter’s history, edging out For the Love of Spock, a documentary on Leonard Nimoy. In 2016, Alex Winter’s campaign for Who the F*@% Is Frank Zappa shattered the documentary record with a total of $1,126,036 from 8,688 backers.
Such results are not the norm even for successful Kickstarter campaigns. The average is a modest $6,000. Gadgets and computer games, which have raised more than $250 million since 2009, get most of the attention, but according to Strickler, fine arts projects have a higher rate of success. Dance has the highest rate at 70 percent, more than double the success rate of games. Seventeen films funded in part by Kickstarter campaigns have been nominated for Academy Awards, and four have won. Winners include Inocente, which won best documentary short in 2013, Period. End of Sentence, which won best documentary short in 2019, Hair Love, which won best animated short in 2020, and An Irish Goodbye A Short Film which won best live action short film in 2023. None of these has attracted the widespread attention of the documentaries on Nye, Nimoy, and Zappa, but they count as hugely successful to their creators, their backers, and the Kickstarter team.
Bibliography
Ananian, Alice. “15 Most Funded Kickstarter Projects: Lessons to Learn.” The Crowdfunding Formula, 18 Feb. 2023, blog.thecrowdfundingformula.com/most-funded-kickstarter/. Accessed 9 Jan. 2025.
Assadi, Djamchid. Strategic Approaches to Successful Crowdfunding. Hershey: Business Science Reference, 2016.
Hall, Charlie. "Kickstarter CEO Discusses Company’s New Charter, Goals for the Gaming Space." Polygon, 21 Sept. 2015, www.polygon.com/2015/9/21/9364015/kickstarter-ceo-strickler-public-benefit-charter-shenmue-pebble-star-citizen-asylum. Accessed 9 Jan. 2025.
Isaac, Mike, and David Gelles. "Kickstarter Focuses Its Mission on Altruism over Profit." New York Times, 20 Sept. 2015, www.nytimes.com/2015/09/21/technology/kickstarters-altruistic-vision-profits-as-the-means-not-the-mission.html#:~:text=Many%20technology%20start%2Dups%20aim,have%20no%20interest%20in%20that. Accessed 9 Jan. 2025.
Mandelbaum, Robb. "Kickstarting a Business Model." Forbes 197.1 (2016): 40–41.
McCracken, Harry. "The Kickstarter Economy." Time 180.14 (2012): 32–36.
“Oscar-Nominated Kickstarter Campaigns: From Concept to Silver Screen.” Kickstarter, updates.kickstarter.com/oscar-winning-kickstarter-campaigns-from-concept-to-silver-screen/. Accessed 9 Jan. 2025.
Steinberg, Don. The Kickstarter Handbook: Real-Life Crowdfunding Success Stories. Philadelphia: Quirk, 2012.
Walker, Bob. "The Trivialities and Transcendence of Kickstarter." New York Times Magazine, 5 Aug. 2011, www.nytimes.com/2011/08/07/magazine/the-trivialities-and-transcendence-of-kickstarter.html. Accessed 9 Jan. 2025.