Kickstarter Claims Creative Projects Have Reaped $5.3 Billion From Its Crowdfunding Platform
Kickstarter is touting an academic report finding that the crowdfunding site has produced a significant economic impact for creative projects launched on its site — to the tune of $5.3 billion to date.
Overall, Kickstarter projects have generated 29,600 full-time jobs and employed 283,000 part-time collaborators, and have led to the creation of 8,800 new companies and nonprofit organizations.
Kickstarter’s claims are based on research conducted by Prof. Ethan Mollick of the U. of Pennsylvania’s Wharton School, published earlier this month. While the company provided data for the study, it said it had no influence over his analysis; funding for the project was provided in part by the Kauffman Foundation. Kickstarter used Mollick’s findings from a sample of 61,654 projects launched before June 2015 and extrapolated them to include the last 12 months of projects.
One caveat: The study only looked at successfully funded Kickstarter projects, excluding those that failed to reach their goals.
Of the Kickstarter projects Mollick analyzed, he found that every dollar raised resulted in a mean of $2.46 in additional revenue outside of Kickstarter — although amounts were lower for films, and much higher in categories including food and product design. The study also found that 37% of filmmakers, photographers, artists, designers, musicians and other creators said their Kickstarter projects helped them advance their careers, with 21% saying they received an increase in annual earnings after running a successful project.
“This research illustrates how the Kickstarter community has strengthened the economic picture for creators while serving as a valuable engine for cultural production,” Kickstarter co-founder and CEO Yancey Strickler wrote in a blog post.
Kickstarter takes a 5% cut of funds collected for projects that achieve their funding goal. In addition, a payment-processing fee of 3%-5% is applied to those projects.
Entertainment projects funded on Kickstarter include Rob Thomas’s “Veronica Mars” movie, which garnered $5.7 million from fans; Spike Lee’s “Da Sweet Blood of Jesus,” which raised $1.4 million from 6,400 backers; Alex Winter’s documentary on Frank Zappa, which has pulled in $1.1 million; “For the Love of Spock,” a documentary about Leonard Nimoy by his son Adam Nimoy, which topped its $600,000 fundraising goal; and Deaf West Theater’s production of a song from “Spring Awakening” for this year’s Tony Awards, which raised $211,634.
Strickler also called out the study’s finding that Kickstarter has enabled creators to pay collaborators — like editors, illustrators, backing musicians and crew — whom they wouldn’t have been able to otherwise compensate.
Of the 8,800 new companies and nonprofits have gotten their start through Kickstarter, 82% continue to operate today. Firms that got their start on the platform include Palmer Luckey’s Oculus VR, which acquired by Facebook for $2 billion. brought virtual reality into the mainstream; podcast network Radiotopia; Debbie Sterling’s games and entertainment startup GoldieBlox; and Eric Migicovsky’s smartwatch company Pebble.
Kickstarter, which was founded in 2009, is based in Brooklyn. Investors in the company include Abundance Partners, Betaworks, Chris Dixon, Chris Sacca, Dan Rosensweig and Twitter and Square CEO Jack Dorsey. Competitors include Indiegogo and GoFundMe.
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