The Impact Of Kickstarter On The Arts And Creation

Kickstarter is a crowdfunding site, based out of Greenpoint, Brooklyn, which specializes in funding the arts and creation. Crowdfunding is a way of raising funds by collecting small donations from a large amount of backers (Bradsford, 2012, pp. 10). Starting in 2009, Kickstarter has raised over 1.5 billion dollars, successfully funding over 90,000 projects (Stats, 2015). In exchange for a 5% fee on overall funds collected, Kickstarter effectively acts as an intermediary between creates a bridge between producers and their backers. Kickstarter functions as a reward or pre-purchased based crowdfunding site, and is considered one of the leaders of this type (Bradsford, 2012, pp. 16). Bakers are tempted into supporting a project by promises†¦show more content†¦Crowdfunding is not always successful. Kickstarter itself has a competition rate of only 36% (Stats, 2015). Many times this happens when set funding goals or much higher (on average 4-5 times successful projects) than t he final products actual worth (Byrus, Kuppuswamy, 2014, pp. 8). Of those succeed , 50% only accomplish it by very slim 10% margin (Byrus, Kuppuswamy, 2014, pp. 8). Normally, this would be a cause of concern. If someone has invested into a product that had failed to be completed, was cancelled, or didn’t receive enough funding, then they essentially just threw away their money. Kickstarter found a way to protect these investors, by an â€Å"all or nothing† method, also known as the threshold method. They do not charge the backers until the project is completed, and the product is made available (Mollik, 2014). Another cause of concern is the potential for fraud. It is easy to believe that some people may just take the money without actually producing the product, however, â€Å"initial empirical data on unregulated crowdfund entities suggest that no material fraud or risk to capital providers exists† (Groshoff, 2014, pp. 550) While it is only initial data, and thus subject to change in the future, Kickstarter has a very low risk of fraud. As of 2014, only $21,324 out of $1.5 billion has been recorded as fraudulent (Groshoff, pp. 549). This shows that it is a trusted site, with very low risk by the investors (funders). After