What Does One Do To Obtain Funding For A New Invention?

What Does One Do To Obtain Funding For A New Invention Movie Or Comp

What does one do to obtain funding for a new invention, movie, or company? Do you go to the bank? Do you go to venture capitalists? Do you go to angel investors? Crowd Funding is an alternative to these traditional sources of funding.

Kickstarter.com is one of the largest of the crowdfunding websites. Here a person posts about the project with a description, maybe a video and the funding needed. Backers then pledge money to the project. If the funding goal is not reached then the project is stopped along with any pending obligations of support. This opportunity for aspiring new artists, inventors, etc., to obtain funding is happening on Kickstarter with thousands of dollars being pledged each day.

The creator of the projects keeps 100 percent ownership of the project in which investors decide if they want to invest. Go to Kickstarter.com and provide a description of the Project of the Day including the offerings and number of backers. Discuss the pledges, the amounts of the pledges, and the number of people offering each pledge amount. What does the pledge amount tell you about the motivation of the customers? Explain why crowdfunding is advantageous to new entrepreneurs.

What information must an entrepreneur provide to get funding? How does Kickstarter manage the collection and transfer of pledges? Would you use this site yourself or recommend it to others? You are to produce an analysis of Kickstarter. In doing this analysis you will answer the questions asked.

Use a table to show the Kickstarter offerings and the number of backers. Then discuss these pledges and why this crowdfunding is of advantage to entrepreneurs. Using several products, compare the type of information the entrepreneur needs to get funding and discuss if you would invest or recommend to others. In 3 or 4 pages, provide your discussion and analysis—we encourage the use of spreadsheets and tables to justify your response.

Paper For Above instruction

Obtaining funding for innovative projects, whether they are inventions, movies, or new companies, often presents significant challenges for entrepreneurs. Traditional funding avenues such as bank loans, venture capitalists, and angel investors have long been the go-to sources, but these options often require substantial credibility, collateral, or experience. In recent years, crowdfunding platforms like Kickstarter have revolutionized access to capital, democratizing the fundraising process and allowing creators to engage directly with potential backers.

Kickstarter, launched in 2009, is a prominent example of a reward-based crowdfunding platform where creators can showcase their projects to a global audience. To start a campaign, entrepreneurs must prepare a compelling project description that outlines their product or idea, along with a clear funding goal and deadline. Including media such as videos or images significantly enhances the campaign's appeal and can increase backer engagement. The platform allows creators to set various pledge levels, each offering different rewards or incentives, motivating backers to contribute according to their interest and capacity.

The pledge amounts and the number of backers at each level provide insights into potential customer motivation and market interest. For example, a campaign with a high number of small pledges indicates broad interest, often driven by the perceived value or novelty of the project. Conversely, larger pledge amounts can suggest strong believer engagement or higher perceived value. The distribution of pledges can help entrepreneurs gauge product appeal, pricing strategies, and potential demand.

Kickstarter manages pledge collection by integrating with secure payment processing services, typically allowing backers to pledge via credit card or other electronic payment methods. Once the campaign concludes successfully, Kickstarter processes the funds and transfers them to the project creator, deducting a platform fee—usually around 5%—and payment processing fees. This streamlined system reduces the administrative burden on entrepreneurs, enabling them to focus on product development and delivery.

Crowdfunding offers several advantages to new entrepreneurs. It provides vital proof of market interest, reduces reliance on traditional lenders or investors, and retains full ownership and control of the project. Additionally, it offers marketing exposure and an early customer base. However, successful campaigns require thorough planning, compelling storytelling, realistic funding goals, and active promotion.

Analyzing a specific Kickstarter project, such as a recent “Project of the Day,” highlights the importance of understanding pledge tiers, backer demographics, and reward structures. For instance, a tech gadget campaign might offer early-bird pricing, limited-edition accessories, or exclusive updates. By examining the table of pledge levels and the respective number of backers, one can see how the campaign appeals to different segments of potential supporters. For example, a pledge of $25 might attract many backers, indicating affordability and interest, while higher pledge levels could indicate niche interest or higher perceived value.

Entrepreneurs need to prepare clear descriptions, compelling visuals, and feasible delivery plans to secure funding. They should also have a strategy for engaging backers through updates and social media. Kickstarter manages pledge collection efficiently but places the onus on creators to fulfill promises and communicate transparently. Many creators use the funds to cover prototype development, manufacturing, or marketing costs, making crowdfunding a flexible financing option.

If I were considering investment, I would evaluate the project’s feasibility, creator credibility, and backer engagement levels. I would recommend Kickstarter to entrepreneurs seeking initial validation, community support, or early funding, especially for innovative or consumer-facing projects. However, it is critical to acknowledge the competitive environment and the need for strategic planning to ensure a campaign's success.

In conclusion, crowdfunding through platforms like Kickstarter provides a valuable avenue for entrepreneurs to raise capital, validate products, and build a customer base without losing ownership rights. Its success depends on transparent communication, strategic offering tiers, and active campaign promotion. For many, it represents a modern, accessible alternative to traditional funding channels, fostering innovation and entrepreneurship in diverse fields.

References

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