Read the case study and then answer the question below: Q. What makes Kickstarte

Question

Read the case study and then answer the question below:

Q. What makes Kickstarter entrepreneurial, and how is this strategy working for them? (Provide any references used)

CASE ? BACKERS BEWARE: KICKSTARTER IS NOT A STORE By 2015, the concept of "crowdfunding" had matured.Whatever promotion Wilson did worked. The project According to Wharton School researcher Ethan Mollick aunched on March 20, 2013, and within 24 hours it not only crowdfunding allowed "founders of for-profit, artistic, and had reached its $829 goal but was on its way to getting 1,247 cultural ventures to fund their efforts by drawing on rela backers and $22,562 in pledges.4 It also received headlines tively small contributions from a relatively large number because of the extreme public res of individuals using the Internet, without standard finan a scam and death threats against Wilson and her family. cial intermediaries." It was considered "a novel method for The majority of negative responses seemed to come from funding a variety of new ventures." but it was not without those who believed that Susan Wilson had misrepresented its problems. Although billions of dollars had been raised the nature of the project, that she had acted in bad faith for projects ranging from something as small as an artist's intending to profit from her daughter's story-and thereby video diary to large endeavors such as the development of had violated Kickstarter's project guidelines. a new product for accessing email or an award-winning Kickstarter clearly stated that its crowdfunding service film documentary, very little was known about the kinds could not be used for "charity or cause funding" such as of mechanisms that made funding efforts successful or an awareness campaign or scholarship; nor could a project whether "existing projects ultimately deliver the products be used to "fund my life"-things like going on vacation, they promise." One example of this "new phenomena in buying a new camera, or paying for tuition. And a project entrepreneurship" was the story of Kickstarter. As of had to have a clear goal, "like making an album, a book, January 2015, Kickstarter was the largest U.S. crowd- or a work of art.... A project is not open-ended. Starting funding site, with over 201,000 launched projects, over a business, for example, does not qualify as a project." In 7 million backers, and over $1.49 billion in pledged dollarsaddition, for Kickstarter to maintain its reputation as one 87 projects had raised over S1 million each. Kickstarter of the top crowdfunding services, it had to make sure it also had a success rate of just nearly 40 percent, meaning kept control of how the projects were promoted: "Sharing 60 percent of the time the backers got nothing in return your project with friends, fans, and followers is one thing for their donations. What was this crowdfunding thing all but invading inboxes and social networks is another. about, and was Kickstarter truly a boon for entrepreneurs,Kickstarter responded to comments on the Wilson proj- or a bust for backers? ect by affirming its support, saying, "Kickstarter is a fund- "KickstarterDumb people giving money to anony- ing platform for creative projects. The goal of this project mous people in hope of some goodies in an unspecified is to create a video game, which backers are offered for a amount of time."s So read a comment posted in response S10 pledge. On Kickstarter backers ultimately decide the to a story about one nine-year-old girl's Kickstarter cam- validity and worthiness of a project by whether they decide paign. Mackenzie Wilson wanted to raise S829 so that to fund it."However, backers and Kickstarter fans were she could go to computer camp and create her own video concerned, with one user commenting. "It's all of our jobs game. (She said her older brothers were making fun of her, to be on the lookout for shady Kickstarters and personally and she wanted to prove that girls could do "tech stuff" I don't want to see it devolve into a make a wish founda- too.) The trouble was that Kickstarter rules said someone tion for already privileged kids to learn how to sidestep had to be at least 18 years old in order to list a project, rules of a website to profit." And therein lay Kickstarter's so Mackenzie's mom, Susan Wilson, created the informa- dilemma-how to provide a service that allowed fund tion listing. And Susan Wilson was a Harvard graduate ing for obvious commercial ventures while also providing and a known entrepreneur and had allegedly promoted her safeguards for backers. daughter's Kickstarter campaign by tweeting celebritiesKickstarter had remained a service business, collecting 5 percent of funded projects as a fee for this service, and had kept itself hands-off otherwise. However, in addition to getting comments such as the ones in response to the This case was prepared by graduate student Eric Engelson of Pace University. Wilsons' project, Kickstarter had come under fire for pro- like Lady Gaga and Ellen DeGeneres to elicit support. Professor Alan B. Eisner of Pace University, ProfessorDan Baugherof Pace viding no guarantees that funded projects would actually produce promised items or deliver on the project's goals. class discassion rather than to illastrate either effective ar ineTective hanciling of In September 2012, Kickstarter's three founders had even University, ard Associate Professor Pauline Assenza, Western Connecticut State University. This case was solely based on library research and was developed Sor an administrative situation. Copyright O 201S Alan B. Eisner. had to create a specific blog post titled "Kickstarter Is Not CASE 6: BACKERS BEWARE: KICKSTARTER IS NOT A STORE C21

Explanation / Answer

Kickstarter is a subsidizing stage for innovative undertakings. What's more, they has given the strict cautioning to individuals making ventures on their stage that, there can't be any "philanthropy or cause subsidizing" and "support my life" crusades. Furthermore, they check the undertakings properly before acquiring it front of the 1000+ patrons.

What's more, by getting the honest to goodness ventures front of the sponsor, they have earned their trust and ability to help and reserve more undertakings. That is the way, they have given group financing to more than 201,000 propelled ventures, more than 7 million patrons, and over $1.49 billion in vowed dollars—and 87 ventures had raised over $1 million each.

What's more, they are entrepreneurial as they get 5% cut out of the assets gathered from every one of the ventures as their expense. Yet, their significant hazard is with the zone of shady activities. When they have control over shady ventures, they can draw in more benefactors, therefore more income produced.

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.