Should You Use Kickstarter for Your Business

The use of crowdfunding has seen significant growth in recent years as more companies are turning to this innovative approach of raising capital. Kickstarter is one of the more popular tools associated with crowdfunding.

It is a platform where potential funders and project creators can interact directly and companies may offer reward-based incentives for financial backing from members of their target market or social media followers.

How Kickstarter Works

Kickstarter is an online crowdfunding platform that allows individuals, businesses and nonprofit organizations to raise funds for a variety of projects.

It was founded in 2009 and has become an increasingly popular platform for entrepreneurs raising capital, as well as charities raising awareness and funding for causes.

Under the Kickstarter model, backers pledge money to a particular project in return for rewards if the project reaches its funding goal. Project creators set a goal amount and deadline, while backers typically receive a reward based on their pledge level.

For example, if someone pledges $50 to a film project they may receive a digital download of the final product. Kickstarter takes 5% of all funds raised from successfully funded campaigns, plus an additional processing fee of 3-5%.

It is important to note that launching a Kickstarter campaign does not guarantee success – many projects fail to reach their funding goals and funds collected from unsuccessful campaigns are returned to backers.

Therefore it’s important for project creators to develop comprehensive plans both before and during the campaign in order to reach their desired goals.

This includes putting together effective communication strategies such as creative videos, graphics or online ads or social media posts in order to promote the campaigns message with potential backers.

Kickstarter Best Practices

Kickstarter is a great way to bring new products and ideas to life, but it’s important to understand the platform and how to effectively plan and execute a successful campaign.

Here are some key points to keep in mind when using Kickstarter for your business:

Have an engaging pitch: It’s important to have compelling, attractive visuals and an engaging pitch that gives potential backers an idea of what your product is about, why they should support you, and what rewards will be associated with each contribution.

Set realistic goals: Setting realistic fundraising goals – both in terms of money raised but also time – will make it easier for you to reach them. This might include outsourced services like marketing, manufacturing, or video production as well as your goals for paying rewards for contributors.

Be prepared with a budget: Having a budget can help ensure that you don’t lose money on the project due to miscalculated fees or taxes. You should also determine the cost of production and assembly before setting pricing tiers.

Know how you will use funds: Be clear in explaining how funds raised on Kickstarter will be used towards the development or launching of your product, such as research & development, manufacturing & assembly costs, etc. This is often one of the first questions potential backers may ask before contributing!

Have clear goals: Outline exactly what needs to be achieved with each phase of the campaign – when do you expect progress updates? What other promotions are planned? When do milestones need hit? Establishing these parameters ahead of time helps ensure success through accountability for all those involved in the project.

Build community engagement pre-launch: Platforms like social media are ideal tools for pre-launch community engagement – it’s important that potential backers know about your crowdfunding effort early enough so they can support your project from launch day onward! Take advantage of hashtags, liked pages & shared content (done mindfully) throughout these stages to create a sense of anticipation around your project prior to launch date.

Kickstarter Pros and Cons

For those considering using this type of resource for their business, it’s important to weigh all the pros and cons against your overall goals and budget before jumping into the Kickstarter world.

There are numerous advantages that come with using this platform, but there can also be major drawbacks if used incorrectly or without proper preparation. This overview will serve as an introduction, providing insight on what entrepreneurs need to know about using Kickstarter as a method for funding their business endeavors.

    • Advantages of using Kickstarter
    • Disadvantages of using Kickstarter

Advantages of Using Kickstarter

Using Kickstarter for your business can be an excellent way to fund your project without having to rely on loans or investments from external sources. It can also help you validate your product idea, create a community of supporters, and find beta testers for your product. In this article, we’ll look at the advantages of using Kickstarter for your business:

    • Funding without loans or external investments
    • Validating your product idea
    • Creating a community of supporters
    • Finding beta testers for your product

Access to a Global Audience

For businesses seeking to launch a product or service, Kickstarter provides access to a global audience of potential customers. With millions of users from around the world actively seeking out projects to back, entrepreneurs have the opportunity to reach out and get the support they need for their business endeavor without investing in expensive marketing campaigns.

Moreover, backers aren’t just providing financial support—they’re offering feedback and suggestions that can help founders create a better-targeted product or service before its launch. This type of customer engagement is invaluable for understanding emerging trends and gauging customers wants and needs with minimal resources.

Finally, having an engaged customer base also creates an organic “stamp of approval” from people who have used the product or understand what you are trying to build. This can be particularly beneficial in industries where customer reviews are sought after (i.e., app development):

    • Customer engagement provides feedback and suggestions
    • Customer engagement helps to understand emerging trends
    • Organic “stamp of approval” from users

Low Risk and Cost

One of the main advantages to using Kickstarter for your business is the low risk and cost involved. With no up-front costs, you can launch your project with minimal investment, reaching new customers and marketing potential globally.

You can also set a target goal to make sure you get the capital needed for the project. Since backers are not charged until after your project hits its crowdfunding goal, there’s no risk to investors if it fails to reach its financial target.

There is also no cost to create a campaign page or promote it on social media platforms like Facebook, Twitter and Instagram as these services are free. You may have some costs associated with offering rewards or incentives for pledges depending on what type of rewards you’re offering, so be sure to factor that in when setting up your campaign goals.

Doing research into similar campaigns can also help you gauge how much money you’ll need to raise, so it pays to plan ahead.

    • Understand the risks and costs associated with crowdfunding
    • Set a realistic target goal
    • Take advantage of free social media platforms to promote your project
    • Consider offering rewards or incentives for pledges
    • Research similar campaigns to help you gauge how much money you’ll need to raise

Brand Exposure

Using Kickstarter can have a number of advantages for your business, one of which is increased brand exposure. With its ease of use, Kickstarter can be used by entrepreneurs to quickly and effectively spread the word about their product or service before it has been released to the broader market.

By creating a compelling campaign and gaining early traction with investors, you can create buzz around your brand in the form of reviews, press coverage and social media attention — all which help build awareness for your product.

Moreover, by leveraging an existing backer base on the platform, you can gain access to a pre-existing market that resonates with what you are offering. This audience may be willing to provide feedback and offer real-time money to undertake iterations or improvements during pre-sales — something that could make or break your product launch.

Advantages of using Kickstarter

    • Increased brand exposure
    • Create buzz around your brand
    • Gain access to an existing market
    • Real-time money for product improvements

Tips for using Kickstarter

    • Create a compelling campaign
    • Gain early traction with investors
    • Generate reviews, press coverage, and social media attention
    • Leverage existing backer base
    • Provide feedback and offer real-time money

Disadvantages of Using Kickstarter

Kickstarter can be a great platform to get your business off the ground, but it’s not without its drawbacks. One of the biggest cons of using Kickstarter is the high barrier to entry. It can be difficult to get funded through the platform, and you may not get the kind of traction you expect. Additionally, there are a lot of fees associated with running a Kickstarter campaign, so costs can start adding up quickly.

Let’s take a look at some of the other disadvantages of using Kickstarter for your business:

    • You may not get the desired amount of funding.
    • The platform can be competitive, making it difficult to stand out.
    • It can be hard to keep your backers engaged.
    • The fees associated with running a Kickstarter campaign can add up quickly.

Limited Timeframe

Using Kickstarter to fund a campaign comes with a distinct disadvantage in the form of its limited timeframe. As of April 2020, proposed Kickstarter campaigns must be fully funded within 60 days if the project is to move forward. This can put a lot of pressure on creators to make their campaigns successful amidst a short window of opportunity. With only 60 days to work in, it’s important for creators to plan ahead and get organized with their campaigning goals in order for their project to succeed before its funding runs out.

Furthermore, despite best efforts, there are still risks that come with using limited timeframes. If the project fails or unable to meet the goal by even one dollar within the time frame provided, funds gathered prior will be returned back to contributors and projects will not move forward. It’s important for creators using Kickstarter as its platform recognize this rule and plan accordingly or face losses in time and money invested on pre-campaign materials such as:

    • Production costs
    • Overhead fees
    • Marketing

Difficulty in Reaching Your Goal

Using Kickstarter comes with the risk of not reaching your monetary goal, as the funding is all or nothing — if you don’t meet your goal, you don’t receive any of the pledges. A lot of times when someone is trying to fund a project using Kickstarter they might set a funding goal that is higher than they really need in order to complete their project. This can sometimes lead to setting a number that’s too high and not being able to meet it. At this point, all the pledges are canceled and your backers do not have to pay anything. To avoid this happening, it is important to carefully calculate how much money you need to reach your goal and plan for what happens if it isn’t enough.

Another difficulty with Kickstarter is when potential donors are hesitant about donating because they aren’t sure if their money will be used properly or if there will be a return on their investment. This risk-averse attitude can cause potential donors to hesitate before backing your project.

To mitigate this issue, you should provide clear objectives for how the funds will be used as well as promotional incentives such as discounts on products or merchandise for larger donations that can help encourage people make bigger pledges for your project and also increase transparency between yourself and donor.

    1. Carefully calculate how much money you need to reach your goal.
    2. Plan for what happens if it isn’t enough.
    3. Provide clear objectives for how the funds will be used.
    4. Offer promotional incentives such as discounts on products or merchandise for larger donations.
    5. Increase transparency between yourself and donor.

Lack of Control

A major disadvantage of using Kickstarter for business is that you lose control of the project, particularly in the post-campaign phase. The risks associated with a lack of control can lead to unhappy customers and financial loss for your business.

When your Kickstarter project ends, you have to go through the process of fulfilling customer orders and it may not be easy due to time constraints or budgeting issues. With a lack of control over the production and fulfillment processes, you could end up with customers complaining about inadequate products or delayed shipping. In some cases, this could mean lower customer loyalty and damage to your reputation as a business owner.

    • Risks associated with a lack of control
    • Fulfilling customer orders
    • Lack of control over production and fulfillment processes
    • Lower customer loyalty

Damage to Reputation

It’s also possible you won’t receive the funds from Kickstarter that you were initially expecting due to their own fees or unexpected issues during the campaign period. This could mean less money in your pocket after all is said and done, so it’s important to keep that in mind when choosing whether or not to use crowdfunding platforms like Kickstarter for your business.

How to Successfully Fund on Kickstarter

Kickstarter allows small business owners to receive funding for their projects through online crowdfunding. This provides a great opportunity for entrepreneurs who don’t have access to traditional financing methods such as angel investors or venture capital. However, successfully launching a successful Kickstarter campaign is not as simple as creating the project and waiting for backers to line up the money. There is an art and science to running a successful campaign.

Successful kickstarter campaigns require hard work, creativity and careful planning. When creating your project, you should ensure that you are offering rewards that will entice people to donate as well as have realistic goals and deadlines for achieving them. Also ensure that you clearly explain what contributions are meant to fund and how the funds will be utilized in detail.

Once the project is ready, it’s important to ensure that you market it wisely through email campaigns, social media, press releases and other methods of outreach so more potential backers become aware of the project. Lastly, Kickstarter campaigns need strong follow-up from fundraisers in order to remind contributors of their perks come fulfillment time and reward early supporters with exclusive deals or offers on repeat purchases or donation if applicable.

By following these steps carefully small business owners can take advantage of this great platform for generating capital successfully:

    1. Ensure that you are offering rewards that will entice people to donate.
    2. Have realistic goals and deadlines for achieving them.
    3. Clearly explain what contributions are meant to fund and how the funds will be utilized in detail.
    4. Market the project wisely through email campaigns, social media, press releases and other methods of outreach.
    5. Follow up with contributors to remind them of their perks come fulfillment time.
    6. Reward early supporters with exclusive deals or offers.

Best Kickstarter Alternative

Although Kickstarter is one of the most popular crowdfunding platforms in the world, it is not necessarily the best option for everyone. As with any major business decision, it pays to do a bit of research before committing to a particular course of action. Below are some of the most popular alternative crowdfunding platforms that are currently available and may work better for your particular project or business.

Donation-Based Platforms: These types of platforms allow users to make monetary contributions without expecting anything in return. The funds will go towards supporting your cause or business venture and can be used however you see fit. Popular donation-based platforms include GoFundMe.

Reward-Based Platforms: Unlike donation-based platforms, these types of sites focus on exchanging rewards for financial contributions sent by donors. Rewards can range from T-shirts and mugs to exclusive access to products or services related to your project or business venture. Common reward-based crowdfunding platforms include Startengine, Crowdfunder and Seedinvest.

Equity-Based Platforms: These sites focus on offering equity ownership in exchange for investments sent by accredited investors who meet certain income or wealth requirements set forth in federal law. Companies such as WeFunder, Seedr and CircleUp specialize in providing this type of equity-based investments options which may suit you better than other alternatives if you are looking for more long term capital investments in your venture. Equity-based investing also allows entrepreneurs to retain control over their businesses while earning financing through slower but steadier methods than those offered with donation-based and reward-based crowdfunding.


In conclusion, Kickstarter can be a great platform for entrepreneurs looking to quickly fund their business idea. It’s important to consider if crowdfunding is the right option for your business before taking the plunge; this platform works best when used in conjunction with an established brand or name. Additionally, thought should be given to marketing your campaign and understanding legal regulations with regards to crowdfunding before getting started.

Ultimately, any risk associated with using Kickstarter remains with each individual entrepreneur or business. However, used in the right circumstances this platform can potentially provide financial and networking opportunities that could help launch a successful venture.

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