New York City–based Kickstarter was initially developed to support creative projects, but has emerged as a significant force in financing technology start-ups.
“Entrepreneurs have used the site to raise hundreds of thousands of dollars at a time to develop and produce products, including a networked home sensing system and a kit that prints three-dimensional objects,” notes MIT’s Technology Review.
Kickstarter has become a viable alternative to venture capital funding. Last year, it funded some $99 million, equivalent to 10 percent of all seed investment.
In April, ETCentric highlighted a report suggesting that Kickstarter funding was expected to triple this year to around $300 million. At that time, the top projects seeking funding involved film, music, design, art, publishing, games, and technology.
Typical requests for funding are modest, but some projects have attracted more than $1 million. Angel stakes are typically less than $600K. And through Kickstarter the founders retain creative control and attract committed followers and customers.
“If crowdfunding sites start offering equity shares, it will make a few dozen VC firms disappear,” suggests Paul Kedrosky, senior fellow at the Kauffman Foundation.
New York City–based Kickstarter was initially developed to support creative projects, but has emerged as a significant force in financing technology start-ups.
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