What is Kickstarter?
Kickstarter is a reward-based crowdfunding platform. Meaning to say that if you had a creative idea, you could launch a funding campaign for your project on the platform.
The creative ideas can come in the form of:
Art, Comics, Crafts, Dance, Design, Fashion, Film & Video, Food, Games, Journalism, Music, Photography, Publishing, Technology, and Theater
Take for instance Ryan and Joel, two of the founders at We The People. Back in 2014, they wanted to create a slim wallet but did not have the funds to manufacture and market it to the world.
They created a prototype, documented it and launched a funding campaign on Kickstarter where they asked for $2000 in order to manufacture a batch of wallets.
They raised about $5000 and with that money, they made the wallets and sent them to the people that helped them out on Kickstarter.
So... how does Kickstarter make money?
Running a platform like Kickstarter is no easy feat.
If a project is successfully funded, Kickstarter applies a 5% fee to the funds collected for creators. Stripe, the payments processor will also apply payment processing fees (roughly 3-5%).
If a project does not hit it's funding goal, no fees will be collected or imposed.
Public Benefit Corporation
Kickstarter is a Benefit Corporation,Benefit Corporations are for-profit companies that are obligated to consider the impact of their decisions on society, not only shareholders. Radically, positive impact on society becomes part of a Benefit Corporation’s legally defined goals.
You can read more about what that exactly means here