ITM301 CASE1 :Case Assignment Crowd Funding

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 these 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 with return of any pending obligations of support.

Kickstarter started in 2009, and since that time has been focused on helping creative types find funding sources. Since 2009 it has received almost 2 billion dollars in pledges from 10 billion backers for over 260,000 projects such as films, music, stage shows, comics, journalism, video games, technology, and food-related projects. So this is a great opportunity for aspiring new artists, inventors, etc., to obtain funding. This is happening on Kickstarter with 1000’s of dollars pledged each day, where the creator of the projects keeps 100 percent ownership of the project in which investors decide they want to invest.

Go to Kickstarter.com and look at the various project categories. Select a category and a project of interest to you. Provide a description for one of your selected projects, including the offerings and number of backers. Discuss the pledges, the amounts of the pledges, and the numbers of people for different pledge amounts. What does the pledge amount tell you about the motivation of the customers?

Explain why crowdfunding may be advantageous to new entrepreneurs. How does Kickstarter seek to build a community for the 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?

Assignment Expectations
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.