Crowdfunding: How Kickstarter is changing the game

Broken Age screenshot

A screenshot from the upcoming Double Fine Productions game, “Broken Age”.

No matter who you are or what you do for a living, if you live in America (or most of the rest of the world, for that matter), over the last few years you haven’t been able to turn on a television or a radio, or even go outside without hearing about terrible economic turmoil.

The news of government bailouts, high unemployment and newly coined terms like “fiscal cliff,” have been pervasive. Banks have been reluctant to provide relief for fear of unpaid loans, and families and small businesses alike have suffered as a result.

This risk-averse behaviour on the part of investors has meant that there has been a slow-down in investment in new ideas and passions. Unless it was a sure bet, there was little incentive for anyone to loan any money to unique projects. In tough times, if your idea isn’t golden, it doesn’t make the cut – invisible hand, and all that.

But that just wasn’t good enough for some. There were amazing ideas and projects out there that just needed a little capital to get going, and there were definitely people interested.

One solution was crowdfunding.

Crowdfunding happens when a group of people come together and pool their money in order to support someone else’s idea or project. Over the last few years, the crowdfunding platform Kickstarter has run some campaigns that have not only been extremely popular, but also immensely successful.

In a crowdfunding project, an intermediary, such as Kickstarter, monitors and regulates a campaign run by an artist, inventor or some other project group. The crowd – regular people like you and me – can then invest in the project, donating a small (or large) sum of money in exchange for something from the project group, such as early access to a game, a discount on the product when it is released, or some other form of exclusive bonus.

I have donated to a few projects on Kickstarter, such as Double Fine Adventure (now known as Broken Age) by Tim Schafer, and the attempt to get enough capital to make the Veronica Mars movie. Both of these ventures shattered their fundraising goals within a day.

Of course, not all projects are this successful, there are some downright failures, but these projects likely wouldn’t have even had the opportunity to try without a platform like this.

Darcy Dureau, a 26-year-old character animator is just entering the industry from the Vancouver Film School program. She already has projects going, and plans to use some sort of crowdfunding to help get them off the ground.

“A friend and I started coming up with ideas for games when we were in the program together,” she says. “After I finished, I had some time on my hands before starting my new job, so we got to work on making those games a reality. We still have a long way to go, though. Getting a publisher isn’t exactly easy. Kickstarter will probably be the way to go for us.”

There are some arguments against this kind of investment from economists, who claim micro-financing like this could undermine the building blocks of capitalism, causing our government and social system to collapse. These arguments seem to be in the minority, however.

Kickstarter and related sites have not only raised money for business projects, but also gathered donations for disaster relief and other charitable causes. There were a few campaigns for building water pumps in African villages and buying goats for children in India, for example.

For now, the benefits of these alternative solutions to investments seem to reign across the board: Kickstarter gets its cut, the creator gets a chance to get his or her work seen and maybe allow for further innovation, and the “crowd” not only gets to see their interest come to fruition, but they get a special piece of it as well. It’s win-win-win.

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