Crowdfunding: The latest way to get your project funded

Sites like Kickstarter offer both established businesses and startups a chance to finance their dreams.

By , Computerworld |  Business, crowdfunding, kickstarter

But just because you've met your goal, it doesn't mean you stop collecting pledges. Fundraising continues until the deadline date, even if the goal is met beforehand, resulting in some wildly successful projects. An early example was Diaspora, in which four New York University students asked for $10,000 to create open-source social media software. Their project resonated with those looking for an alternative to Facebook, and the students ultimately raised $200,000 via Kickstarter.

Why do they give?

Key to the Kickstarter model are rewards, chosen by the project creator and given to backers in tiers based on their pledge amount. Rewards can be anything from a bumper sticker to a preorder of the backed product to a producer credit. Kickstarter now requires project creators to provide an estimated date of delivery for rewards, but there is otherwise no oversight from Kickstarter to ensure funds are used appropriately or that rewards are distributed.

"The [projects] that always seem to make the money are the ones in which a person gets a product at the end," says Jason Scott, a historian who has funded four documentaries on Kickstarter after years of building a name for himself as an online archivist with projects such as Textfiles.com. He adds that projects that have progressed to the prototype stage and just need money for the final editing, manufacture or distribution are more successful than those that exist only as unproven concepts. In the case of Scott's first documentary, all filming had been completed prior to his launching a Kickstarter project; backers received DVDs when they were released.


Originally published on Computerworld |  Click here to read the original story.
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