The success companies and artists have seen on Kickstarter make it seem easier to raise money than ever before. According to the article Kickstarter projects generate millions of dollars, a notable group of people have raised substantially more money than they intended. According to the article:
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Pebble Technology wanted to raise $100,000 to make 1,000 wristwatches that can be programmed with different clock faces, and they ended up with $10.3 million. The founder of Pebble is 25 years old.
Designer Casey Hopkins asked for $75,000 to make a luxury iPhone dock out of solid aluminum. He got $1.4 million. That was in February 2012 and his project was the first to surpass $1 million.
Artist Rich Burlew asked for $57,750 to put his comic books back in print, and ended up with $1.3 million.
Ouya asked for $950,000 to create a game console and hit $8.6 million in pledges.
Apparently 10% of the films in this year’s SXSW film festival were funded by kickstarter! That’s incredible!
It seems easy, but there is a finder’s fee: Kickstarter takes 5 percent and Amazon.com Inc. takes another 3 to 5 percent for processing the payments. Recipients are also typically taxed on the funds.
It’s interesting to note that most, if not all, of the people who exceeded their fundraising goals already had a reputation for delivering good products as well as a loyal following. It would be much harder for someone to come out of nowhere and achieve the same results.
It will be interesting to see how long this trend lasts and if lawsuits will arise if people who contribute their money aren’t satisfied with what they get. How does one get a refund?
| Filed under: entrepreneurship
| Tags: Amazon
, casey hopkins
, pebble technology
, rich burlew
| 3 Comments »