When Perry Chen, Yancey Strickler and Charles Adler launched Kickstarter in 2009, it created buzz, raised $10 million from investors including Union Square Ventures and angel investors like Jack Dorsey, Zach Klein and Caterina Fake. Kickstarter was started to facilitate artists, musicians, writers, filmmakers and everything that has a touch of creativity, it has so far supported several creative projects and raised $4.2 billion as funds. In fact, the success rate of fully funding a project is 36.84 %. Also, check out the GoFundMe Business and revenue model which is an ideal instance of the same. As the wise said, a successful business is that which offers a solution for a real problem, while making a profit out of it. Kickstarter well justifies this statement. Till date, they have supported 163,869 projects and managed to make between $20 and $28 million as revenue per year. And that’s something worth discussing, isn’t it? This document shed light on Kickstarter’s successful business model, also talks around the ways through which they generate massive revenue.

How Does Kickstarter Work?

Kickstarter is a multifaceted business, which involves two parties – Ideators and Project Backers. And the Crowdfunding platform is designed and crafted to facilitate both entities uniformly.

The project owner or the ideator can list his/her’s idea or concept with relevant images, videos and all other information regarding the same. Further, they can set the goal (the funding required), the time frame for that particular goal to be fulfilled and so. Moreover, if there is any particular rewards, discounts or any outcomes for the project backers, it can also be mentioned.

On the other hand, Kickstarter will manage all the backend operation by charging a small amount of fee. And if the project failed to reach the goal, the funders will either get a refund or their cards will not be charged at all. However, Kickstarter is basically a group of people who can fund impressive ideas, and the best part of the process is, any smart business or entrepreneur can connect with the idea owners and licence their gameplay to make millions.

Kickstarter- Revenue Sources


As mentioned before, the Kickstarter business model is multifaceted, it involves multiple revenue sources.

● Commission from successful campaigns
● Listing Charges
● Paid promotion
● Sponsored listings
● Assisting the campaign (Help project owners’ optimize the campaign)
● Shipping services

For every successful campaign, Kickstarter charge a 5% commission + transaction charges. For instance, if a project managed to raise $1 million, the website will get $9000,000 as commission. Anyhow, the commission will not be taken until the goal is met. In addition, Kickstarter holds the funds in bank accounts till the milestone is met or the deadline is over, the interest generated will be a small treasury income for the company.

Kickstarter is now well recognized and is one of the few dependable crowdfunding firms. For a decade, they have served several ideators and businesses, help them bring their ideas to life. At the same time, the organization has managed to make a massive profit. Apart from the marketing and networking strategies they implemented, their solid business model helps them secure a safe spot among all millennial crowdfunding enterprises.

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