But, similar to the age-old adage that most startups fail, most Kickstarter projects also fail to get fully funded. Because Kickstarter is “all or nothing,” projects need to meet their funding goal before pledges are unlocked to the project founder. But, only about 36 percent of projects make it. In many cases, those that don’t make it across the line do raise some interest, but not enough to become projects. This is not too different from what happens in the venture capital world. According to research by CB Insights, just over 70 percent of startups stall at some point in the VC process and fail to exit or raise follow-on funding.
Kickstarter is often seen as a haven for innovators as it allows them to circumvent hard-nosed bankers, VCs and risk-averse traditional lenders. But, it looks like the crowd could be as skeptical as the average venture capital firm.