Kickstarter Business Model: How Does Kickstarter Make Money?

Sourav Dey Sourav Dey
Oct 12, 2021 5 min read
Kickstarter Business Model: How Does Kickstarter Make Money?

Having trouble looking for a funding platform that will fund your creative project? Not being able to generate investors for funding? Waiting to kickstart your business but not being able to due to finance? Kickstarter, a New York-based public-benefit corporation might be the solution that you are looking for.

Kickstarter is an American company with its headquarters based in New York. Kickstarter helps creators start their projects by getting them what they need i.e. Finance. With the mission to help people who have creative projects become a reality Kickstarter has become a significant platform.

Kickstarter promises its users top-notch services along with several benefits. Being an American company, Kickstarter’s services can be availed by those countries that Kickstarter is being operated. Users must possess either a debit or a credit card.

About Kickstarter
Kickstarter's Areas Of Operation
Kickstarter’s Services
Target Audience of Kickstarter
Business Model of Kickstarter
What is so unique about Kickstarter?
How Does Kickstarter Make Money?
Conclusion
FAQs

Kickstart Successful Funding

About Kickstarter

Kickstarter is a medium to connect creative workers and investors. The campaigns done by Kickstarter aim to make imaginations or ideas into reality. Creators share their idea on the platform and communities help to fund the project.

Since its foundation in the year 2009, Kickstarter boasts when it comes to numbers. With tight competition, Kickstarter has successfully funded more than 200,000 projects so far. This might sound a small amount but it is a great achievement.

Kickstarter's Areas Of Operation

Kickstarter has its operations in several countries. You can create a project if you are from the US, UK, Canada, Australia, New Zealand, Netherlands, Denmark, Ireland, Norway, Sweden, Germany, France, Spain, Italy, Austria, Belgium, Switzerland, Luxembourg, Hong Kong, Singapore, Mexico, Japan, Poland, Greece, and Slovenia.

However, people living in any other country apart from the above-mentioned ones can use their services and can create a project. But, Kickstarter has a strict policy of projects that can be a part of a creative project.

Kickstarter’s Services

Kickstarter’s services are not open for every type of idea. Kickstarter’s services include giving your idea a marketing platform. Anyone with a potential business idea or a creative project can get direct attention from different social media platforms.

It is the backers that back a project by funding them to help an idea become a reality. The creators in return offer certain rewards to the backers which can be a copy of what will be produced. Kickstarter is not an offline store where you can go for funding.

Kickstarter will not charge any amount until and unless the project reaches its funding goal. Once the project has been funded successfully Kickstarter charges a 5% fee on it.


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Target Audience of Kickstarter

Kickstarter does not have a target audience per se because anyone with a keen interest to back a project can become a part of the Kickstarter. According to Kickstarter target demographic, the audience for Kickstarter comprises 78% men and 22% women.

People who are around the age of 25-35 are the most common visitors to Kickstarter. It is the creators sharing their ideas who need the audience because they would generate funding. With the help of behavioral targeting, one can connect with real people.

These people with whom you can get connected are the ones who have supported projects like yours. The project that you have created on Kickstarter will recommend people who have backed similar projects like yours through advertisements.

Behavioral targeting is one of the most popular types of marketing for Kickstarter. So, if you have a creative idea on your mind then someone with similar interests might back you. As mentioned earlier that Kickstarter has helped more than 200,000 projects with their funding.


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Business Model of Kickstarter

Kickstarter logo
Kickstarter logo

Most people wonder how does a crowdfunding platform earns its revenues. Crowdfunding companies work on a commission-based format where the company charges a certain amount of money from its users and some amount for the transaction.

The business model of Kickstarter is multi-sided. If you look at Kickstarter’s earning process and method then you might think that the company earns its revenues by charging certain commissions from its users.

Well, if you think that then you are correct because it charges a 5% commission on the total funds raised. The business model of Kickstarter works on two interdependent customer segments. The two segments include the creators and the backers.

Advertising done by Kickstart is mainly done through social media. Campaigns done by the company are efficient and encourages people to share about Kickstart. A creator’s project will be flooded all over social media, emails, live events, press contacts and many more by Kickstarter so that more audiences get to know about the project.

What is so unique about Kickstarter?

Kickstarter promises its users a unique experience. The company ensures a successful campaign where creators can benefit from the following things:

  • Getting seed capital
  • Can keep the stake of ownership
  • Early feedback on projects so that optimizing can be done
  • Exposure to the social environment

Kickstarter is not into funding treatment or any other such kinds of things. It takes an active part in promoting projects on categories like games, films, music, art, technology, and many more. If you are interested in any of these categories then you can use the services of Kickstarter.

How Does Kickstarter Make Money?

Kickstarter charges a 5% commission fee on the total funds raised. However, they charge a certain amount for payment gateway. The company uses this money to run its site which includes advertising and employee payment.

Kickstarter uses Amazon to collect their payment that is entered by the backers. Whenever a goal for a particular fund is met Kickstarter charges some amount of money.

Conclusion

Kickstarter’s services are one of the best and as a crowdfunding platform, you cannot expect more than your project being marketed for free. This is something that not many companies do. Well, a public-benefit company will do what they do the best and that is help people.

FAQs

What kind of industry is Kickstarter in?

Kickstarter is a crowdfunding platform that is into financial services on internet.

What are the advantages of using Kickstarter?

One can get the following benefits for using Kickstarter:

  • Instant cash
  • Keeping full control of business
  • Chance to create a brand image

Who competes with Kickstarter?

The 6 Best Alternatives to Kickstarter in 2021

  • FundRazr
  • Patreon
  • GoFundMe
  • Chuffed
  • Wefunder
  • Indiegogo

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