Kickstarter 2025: How It Earns Money and What It Costs You
Discover how Kickstarter generates revenue by charging a 5% fee on funded projects, the risks involved for creators and backers, and how payments are processed to support innovative ideas.
Kickstarter generates its income by charging a 5% fee on the total funds raised through its platform. This revenue helps cover the operational expenses such as website maintenance, marketing, and staff salaries, enabling the platform to continue supporting creative projects worldwide.
Project creators attract backers who contribute funds to bring innovative ideas to life. In return, backers often receive rewards or incentives, which can range from early access to products, exclusive merchandise, or even equity shares depending on the project's nature. Creators set a funding goal, and only when this target is met do they receive the pledged amounts to proceed with their plans.
The Risks for Backers and Creators
While Kickstarter empowers creative ventures, it carries inherent risks. Backers may not receive promised rewards or refunds if projects fail or exceed budgets. Similarly, creators might underestimate costs, leading to incomplete projects despite successful funding. Both parties should be aware of these potential challenges before participating.
How Kickstarter Handles Payments
Payments on Kickstarter are processed securely through Amazon Payments. The platform collects funds only after a project reaches its funding goal, ensuring that creators receive the necessary capital to execute their ideas. Since its launch in 2009, Kickstarter has successfully funded over 265,000 projects, fostering innovation across diverse industries.
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