Kickstarter Launches Another Social Fundraising Platform

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Daily Crunch: Out of the Frying Pan Edition

Andy Baio, blogger on Waxy.org and co-founder of Upcoming (acquired by Yahoo back in October 2005), yesterday evening announced the release of Kickstarter.

This is an online platform that enables just about anyone to raise funding from interested individuals. Basically, Kickstarter took what Sellaband is all about and applied it to a wider variety of projects, i.e. not only to discover and fund upcoming bands but anyone who does something creative (think designers, musicians, filmmakers, writers, etc.).

At launch, the service is restricted to people who are invited to the service, but you can sign up here to be notified when that changes.

Baio, who sits on the startup’s board and advised the company for the past 10 months, explains:

The model is simple: a project creator sets a fundraising goal, deadline, and an optional set of rewards for backers. If the goal’s reached by the deadline, then everyone’s charged via Amazon Payments and the backers get their goodies. If the goal’s not reached, nobody’s charged. It’s all or nothing.

People who start projects on the platform to get funded by others retain 100% ownership over everything, but need to find a way to give people an incentive to pledge (this can be anything, preferably related to the actual project of course). Kickstarter also doubles as a publishing platform where project creators can keep anyone or only their backers how the project is doing with text, pictures and videos.

When they reach their deadline with the desired funding, project creators receive 100% of the funds they raised, minus the fees that Amazon charges to process credit card transactions. Kickstarter doesn’t take a cut yet, but will likely start charging fees at some point, otherwise there wouldn’t be much a business model.

I very much like the name, concept and design of Kickstarter, but of course this is nothing new and only time will tell if the startup can make enough noise to stand out of the crop. Similar services include FirstGiving, PledgeBank and Mob Incentive.

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