What are the benefits of Kickstarter for startups?

There are a number of ways of getting funding, from business loans to venture capital, and each has its own drawbacks and benefits. In this article, we take a look at an increasingly popular method of funding – Kickstarter – showing the benefits and outlining how it might help you start your dream business, plus expert insider tips from the team at Mercator London.

What is Kickstarter?
Kickstarter is an online platform that facilitates crowdfunding for a wide variety of projects. Any number of individuals can come together to fund a project they believe in, getting some kind of reward in return for their funding. Creators can set different contribution levels, and for each level, project backers will receive a different reward.

This will typically be the product itself, or some variation on it. Backers will generally believe in the idea and want it to succeed – it's possible that they’ll have to wait months or even years to see a result, and it’s possible that they’ll never receive anything for their financial backing.

Keep your company
One of the biggest advantages of Kickstarter is that, unlike with venture capital, you can retain complete control of your company. 
The platform doesn’t require that you give up equity in return for money, allowing you to retain creative and financial control of your business, while still raising the necessary funding to get your startup going. If the Kickstarter campaign does turn out to be unsuccessful, you’ll still have the opportunity to offer shares in return for funding, meaning you won’t have burned any funding bridges.

Get consumer feedback
Kickstarter offers a massive benefit for startups in that it combines funding with market research. Not only is receiving a lot of funding from a large number of parties a good indication of general interest, supporters are also able to provide feedback on early prototypes. 
Creators can then take that feedback into careful consideration and use it to modify later iterations, helping to optimise the product significantly. Carrying out market research can be expensive and resource-intensive; having the opportunity to essentially be paid to carry out this research is a massive bonus of crowdfunding platforms like Kickstarter.

Free exposure and guaranteed sales
Kickstarter is also an amazing way of marketing your brand. People who fund your idea, even if they only contribute a little amount, are likely to share your product on social media and with their friends. A free form of marketing, each share comes from someone who believes in your brand enough to invest in it before it’s even offering a product. 

Having a large number of backers also eases the tension of having a product with no one to sell it to. Each backer is essentially a guaranteed sale, with the indication that many more will be willing to buy the product when it’s eventually ready for market.

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