Kickstarter.com was founded in 2009 as “a new way to fund and follow creativity” by allowing creative people to collect funding for projects through “crowdfunding.”
Crowdfunding is a new type of investing, which allows the general public to choose projects to support with the investment amount of their choosing. Unlike other types of investing, neither the investors nor Kickstarter has ownership over the project once it is completed.
In order to post a project for funding on Kickstarter, you must apply and follow their project guidelines. Once approved, you must provide a deadline and a minimum target for funding.
If the minimum target of funding that you are trying to collect is not reached by the deadline, then no funds will be collected. The funds will be returned to the donors.
Kickstarter takes 5% of the funds raised, while Amazon Payments – who processes the funds for Kickstarter – takes another 3-5%.
Those posting projects on Kickstarter should know that they are legally liable to their investors if they take the money and fail to deliver on their promises.