What Is Crowdfunding?

Posted at 5:30 PM, Oct 23, 2014
and last updated 2017-05-30 13:46:26-04

TALLAHASSEE, Fla. (WTXL) -- As more and more business move online, companies are now turning to the world wide web for to help fund their latest ventures.

From movies to potato salad, projects are raking in millions of dollars from backers on Kickstarter - putting the decision directly in the hands of consumers when it comes to what they want to see on the market.

"I always felt for some weird reason in my bones that it would happen, and I hate to say I told you so, but I did know it!"

That’s actress Kristen Bell, whose Veronica Mars character made her big screen debut last year - all because of Kickstarter.

The crowdfunding site gives the power to the people, letting them donate to what projects they want to see move forward; helping groups reach their goal, or in the case of the Veronica Mars movie... triple it.

Unlike investors, Kickstarter backers don’t have any financial stake in the company, but they can earn incentives for donating, like t-shirts. And Kickstarter isn’t just for one-time projects, it can help launch entire companies. Like Pebble, who’s created a smartwatch that is compatible with both iOS and Android devices.

Pebble started out asking for $100,000, but thanks to Kickstarter backers, they ended up bringing in over $10 million.

And a lot of good can come from these projects.

Zach Brown set out to get just $10 to make potato salad- and ended up with over $55,000.

"I want to do the most good that I can do with this money," he said. "Kickstarter has a terms of service that prevent giving money directly to charities, so I want to ask people how we can take this money and this moment and do something great with it."

So whether you’re making a movie, a new gadget, or yes, even just a snack, Kickstarter can help you spread the word and bring in the cash.

Kickstarter recently changed it policies stating that every fully-funded project must be completed, or the creators must make the best effort to bring the "best possible conclusion for backers." Otherwise they must return the money to the backers.

Our Kickstarter series continues next week with a local project that will leave your home smelling good.


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