Kickstarter Crowd-funding Hits $1M A Week

Coming up on its two-year-anniversary, Kickstarter co-founder Yancey Strickler is struck by how little the site has changed. Maybe the biggest difference has been just how many artists and creative types have flocked to the crowd-funding site, helping validate a new form of fundraising that is opening the eyes of not only artists but technology leaders.

New York-based Kickstarter, which launched in April 2009, began with the promise of creating an intersection between patronage and commerce, where artists could enlist the help of supporters, who would in turn pledge their money and help validate the artists project. What began as a smallendeavorhas blossomed into a sizable business, one that now raises $1 million a week in pledges and has hit $35 million pledged overall. So far, Kickstarter has helped 5,000 projects get funded with about 2,500 actively fundraising at the moment. About 250 to 300 new proposals come in a day, hoping to appeal to a pool of supporters of more than 600,000 people. Strickler said the concept for Kickstarter, first conceived by co-founder Perry Chen, has proven to be a powerful tool in helping ideas bloom.

There are thousands of projects weve helped thatmay not have existed otherwise and we feel incredibly proud of that, Strickler said. Ive personally backed 340 projects and Im thrilled to be involved in all of them. The mood here in the office is one of excitement. We have a sense of wonder about the ways people are using Kickstarter.

The project are indeed all over the map. One recent project is aimed at building a Robocop statue in Detroit, sim! ilar to the Rocky Statue in Philadelphia. Another one is aimed at replacing use of the N-word in the Adventures of Huckleberry Finn with the word robot. Independent game developer Muse Games is using Kickstarter to launch a limited edition of its game called CreaVures. Strickler said theyre all valid ways to draw support and attention around an idea.

The start-up has gotten a lot of press in tech circles for helping launch Diaspora, the open source social networking project. More recently, the TikTok and LunaTik iPod nano watch kits broke site records, raising close to a million dollars. But for all its success, technology is in the middle of the pack for Kickstarter categories in terms of number of projects. Leading the way are films by a long shot, followed by music and art. While the site has helped other would-be Diasporas and iPod accessories get off the ground, Strickler said Kickstarter is not meant to be a replacement for traditional VC or angel funding.We dont want people looking to do a Series A; that wont work too well with us, he said.

It comes down to the sites mission in creating discrete projects that supporters can rally around, rather than boosting a start-up or business. Kickstarter, in fact, turns down 45 percent of the applications because they dont fit its requirements. Strickler said Kickstarter succeeds because of its simplicity and ! limits a nd because it calls for supporters to be rewarded, often in the form of early access or something produced by the project itself. That ensures that everyone benefits and it helps motivate supporters to spread the word. Projects can raise funds for up to 90 days, but the pledges arent collected unless the project hits its stated goal. That helps ensure theres real demand and interest in the project and reduces the risk for backers.

The site, which makes money taking a 5 percent cut of raised funds, has evolved modestly in its almost two years. One of the more significant changes was the introduction earlier this month of curated pages, which allows organizations, institutions and soon individuals to organize and manage multiple pages of Kickstarter projects. Strickler said its another way to highlight various projects on the site, which can only feature eight of them on its homepage. Overall, he sees more opportunities ahead as different groups discover the power of Kickstarter. He said theater and dance now have the highest success rates, in part because they have strong communities that havent had tools like Kickstarter before. And early success stories are fueling even more projects.

Its allvery organic, Strickler said. When you see one theater project make it, then you see 10 more because of the awareness.

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