what percentage does kickstarter take

What Percentage Does Kickstarter Take?

Elena Hudgens
By Elena Hudgens 8 Min Read

Kickstarter PBC is a funding platform for creative projects. It helps bring these ideas to life, from movies and games to art and design projects. All projects must have an end goal – such as an album, book, or piece of art to be featured on this site, as there is no shop here. To thank their backers for their support, project developers offer unique rewards that specify what they are trying to accomplish with the idea they are funding. Learn more.

The all-or-nothing funding system. 

Before answering the question of what percentage does Kickstarter take, we need to first understand that Kickstarter projects use a funding system called “all or nothing.” The idea was born out of a need to protect artists and minimize risk for everyone involved. No money is paid out if a project does not reach its goal. This means that artists have enough money to make good money on their promise (and, more importantly, are not expected to complete a project without the funds to do so). This also gives funders the confidence that if their ideas are successful at an all-or-nothing goal, they will make money just thinking about it. 

Setting an all-or-nothing goal creates urgency and ensures that early backers are personally committed to bringing in more supporters. In this way, each backer becomes part of a community that crosses the finish line together. Click here to know more about the best Kickstarter products.

How creators control all-or-nothing funding

On Kickstarter, creators can set their own fundraising goals and deadlines. A campaign is either open for one day or can run for up to 60 days. However, 30 days is best as it gives the support team enough time to gather pledges. Once an initiator has launched their project, they have set these requirements, so no technical restrictions prevent the campaign from being changed later. If you decide that now is not the right time and you want to relaunch your project later Kickstarter will not charge you if you relaunch it within six months of the original launch.

Fees

What percentage does Kickstarter take? – Well, in 2009, Kickstarter introduced our 5% fee model for creators. This model is intended to compensate for artists who submit their projects to us. Our goal with this approach is primarily to pay as much as possible, not just “make money”. In 2015, Kndrdo further expanded its commitment by becoming a Public Benefit Corporation: a company that measures its success by how well it fulfills its mission – rather than focusing solely on shareholder profits. It’s important to remember what happens if the project does not meet its funding goal. In that case, no fees are charged. The full breakdown of fees can be found here. 

For two years running, Kickstarter has been able to set an industry standard for creator-friendly fundraising by charging Stripe a reasonable percentage of each campaign’s total, as well as a processing fee (around 3-5%). We developed our model because we believe artists should be paid as much as possible – not just shareholder profits, which are usually limited or non-existent when dealing with traditional gatekeepers like agents and publishers.

Detailed overview 

Kickstarter takes 5% of the total amount when successfully funded a project.. Your project reaches its goal of $10,000 – and then it receives $500 from Kickstarter for each successful campaign! This is what is known as the all-or-nothing model of crowdfunding. Just think of this resourceful tool at your disposal. Kickstarter has been using this model since 2009 and has set the standard with its user-friendly campaigns in return for cash donations from the initiators. As you can see, 67 percent fail to meet their funding goals, but there’s no guarantee that an originator can successfully raise funds through any means other than originator-friendliness, which Kickstarter offers.

Kickstarter’s payment service provider, Stripe, also receives a small percentage of each successful campaign. This amount depends on the total amount of funds raised through your campaign. If you raise more than $10,000 through the platform, there is an additional 3% payment processing fee and a 2% commission per pledge that goes towards Kickstarter’s operating costs. 

For individual pledges – which may or may not be funded by larger backers – a flat fee of $0.20 per pledge, which is handled through the website for all creator awareness campaigns that choose to go that route, as opposed to paying by credit card or Paypal, with each project setting up its own pricing structure based on the numbers collected from those pledging at various levels – again, two percent (of what was asked for) automatically goes into Kickstarter’s operating budget, with no fees imposed on the creators themselves beyond those fees associated with accepting credit cards versus other methods like Paypal.

Another cost that creators often forget about is cancellations and refunds. Kickstarter charges a fee when you have a pledge, and it’s not refundable if there’s a cancellation – even though the recipient (the Backer) ends up paying the fee to Kickstarter without receiving anything in return. For example, let us say a Backer pays $100 for your reward. Before you deliver, he will either:

– Payback your pledge;

– Have a chargeback; or

– Failed to bill you. You will still pay the 5% + $0.20 fee ($5.20) for the $100 your backer pledged to you to reach the project goal with him. But as mentioned earlier, you’ll have to refund it all out of your own pocket because there’s no money left after “paying” these expenses, which equates to a total loss of $8 on that page. There are many ways campaigns can get blindsided by cancellations/refunds, so from every perspective – creator and customer- it’s important to plan ahead and minimize these costly mistakes.

The first step is to ask friends and family if they are sold on your idea. However, these are not enough to fund the project. Therefore, most projects spend money to promote their Kickstarter campaign: 

– Spreading the word through social media advertising such as Facebook and Instagram ads; 

– Maintaining hype by generating buzz; and, 

– Opening wallets with paid advertising campaigns like Facebook ads, which are currently difficult for organic posts. It’s best to start promoting your campaign after it’s successfully launched!

Hopefully this article answered your question “what percentage does Kickstarter take?” Read more about Kickstarter here.

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Posted by Elena Hudgens
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Elena Hudgens is an entrepreneur with 10+ years of experience. She started her journey by building her own e-commerce website on Shopify and turned her $1000 savings to millions in just 2 years. Soon she started different ventures in which she failed and succeeded. And now, she's on a mission to help other entrepreneurs with her life and business lessons.
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