The playground for creative projects, Kickstarter, has long been a launchpad for great ideas, letting creators bring their visions to life through the power of crowdfunding. However, behind the curtain of possibility, a process for creators is less talked about: the Kickstarter credit check. Understanding this financial vetting process is crucial for entrepreneurs with hearts set on funding their next big venture or backers eager to support the latest innovation. In this comprehensive guide, we unwrap the mystery surrounding Kickstarter’s credit check and provide insights for navigating this aspect of the platform.
What is the Credit Check on Kickstarter?
Kickstarter is unique in that it operates on an all-or-nothing fundraising model. If a project doesn’t meet its funding goal, backers are not charged, and the creator receives no funds. But to start this crowdfunding adventure, creators must first go through a thorough vetting process that includes a credit check. This check is part of Kickstarter’s mission to ensure creators can deliver on their promised projects and not leave backers empty-handed.
How Kickstarter’s Credit Check Works
Creators who launch projects on Kickstarter must agree to their Terms of Use, which include providing accurate project details and fulfilling promised rewards or refunds. The credit check process is a step to verify the financial stability of the project creators. Here’s a glimpse into how it works:
To create an account on Kickstarter, the vetting process is designed to be straightforward yet thorough, ensuring that the platform remains a trustworthy and viable space for both project creators and backers. Initially, an individual or entity interested in launching a project must sign up for an account on the Kickstarter website. This involves providing basic personal or business information, depending on the nature of the account. Following account creation, individuals looking to start a project are further screened through the credit check process. This additional step is crucial for assessing the creator’s financial reliability, protecting the backers’ interests, and the platform’s integrity. At this stage, creators may be required to submit more detailed information or documents related to their project or business. Once these steps are completed and the necessary verifications are made, creators can proceed to the final phase of setting up their project for crowdfunding on Kickstarter.
What Documents and Details Do You Have to Provide as a Creator?
- Personal information such as name, date of birth, and address
- Business details, including company name and structure
- Contact information of the individual responsible for the project
Does Kickstarter Contact Points of Reference as Part of the Vetting Process?
In some cases, Kickstarter may need more thorough verification and could reach out to references or financial institutions.
How to Prepare for Your Kickstarter Credit Check
Entering the financial scrutiny of a credit check can be daunting for creators, especially those who might be new to the process. Here’s how to ready yourself:
Understand What’s at Stake
Failing the credit check could mean your project isn’t listed on Kickstarter. It’s crucial to understand the weight of this vetting process and take it as seriously as the business plan or prototype you might otherwise prioritize.
Organize Your Financials
Whether you’re a one-person show or have a team, you must present clear and organized financial documentation to Kickstarter. This includes any business bank accounts, personal credit history, or collateral details if you leverage assets for a loan.
Review and Polish Your Project Page and Plan
Since Kickstarter reviews your project’s credibility in conjunction with its financial standing, ensure that your project explanation is thorough, your costs are well articulated, and you have a solid, realistic plan for execution.
Helpful Tips and Resources:
- Be Clear and Transparent: Honesty is your best policy when it comes to Kickstarter. Never overpromise or underdeliver.
- Build Credibility: Before launching, consider whether there are any steps you can take to strengthen your business or personal credit history.
- Seek Expert Guidance: If you’re unsure about your financials, consider enlisting the help of an accountant or financial advisor.
Gather All Necessary Supporting Documentation
Have all your supporting documents in order. This could include your updated business plan, any licensing or permits required for your product, or a detailed budget breakdown for how you’ll use the funds.
My Company Got Rejected. Now What?
If your project doesn’t pass the credit check and is rejected from Kickstarter, it might feel like the end of the road. But it doesn’t have to be. Here’s what creators can consider once they receive the unfortunate news:
- Reassess Your Financial Plan: Take a step back and examine what may have caused the failed credit check. Is your project not yet financially viable? Do you need to deliver more proof of concept before seeking crowdfunding?
- Consider an Alternative Platform: Look into other crowdfunding platforms that may not have the same financial criteria as Kickstarter.
- Financial Readiness: Use this as a learning experience to ensure your financial readiness for a future Kickstarter attempt or other business venture.
Helpful Links to Kickstarter Policies and Rules
To ensure a smooth Kickstarter campaign, familiarize yourself with their policies and rules. Here are some helpful links:
Mastering the Kickstarter credit check process is about more than just passing a financial test—it’s about building a solid foundation for your project from the ground up. By understanding the requirements, preparing your documentation, and maintaining financial integrity, you set the stage to launch a successful Kickstarter campaign and build a lasting, credible business that backers can trust.
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