NEW YORK — It's not hard to guess that this rickety three-story walkup on the Lower East Side would house a hip Internet start-up. But the red-hot company that's raised more than half a billion dollars from the public to fund passion projects? Crowdfunding phenomenon Kickstarter is on the third floor, with a handful of staffers who don headphones and stare at large iMacs, tweaking the website that brings in an average of 200 new projects daily. A former waiter, Perry Chen, his one-time frequent customer and freelance rock critic Yancey Strickler and designer Charles Adler launched Kickstarter in 2009 as a place where anybody could pitch in to help get passion projects funded. The company helped coin a new word — crowdfunding — as it helped everything from community gardens, books and local plays come to life. It has since grown to include movies (a Kickstarter-funded documentary, Inocente won the Oscar this year) music (singer Amanda Palmer's Kickstarter-funded album made its debut at No. 10 on Billboard) and a red hot tech product (the Pebble smartphone watch launched in February). ----
NEW YORK — It's not hard to guess that this rickety three-story walkup on the Lower East Side would house a hip Internet start-up. But the red-hot company that's raised more than half a billion dollars from the public to fund passion projects? Crowdfunding phenomenon Kickstarter is on the third floor, with a handful of staffers who don headphones and stare at large iMacs, tweaking the website that brings in an average of 200 new projects daily. A former waiter, Perry Chen, his one-time frequent customer and freelance rock critic Yancey Strickler and designer Charles Adler launched Kickstarter in 2009 as a place where anybody could pitch in to help get passion projects funded. The company helped coin a new word — crowdfunding — as it helped everything from community gardens, books and local plays come to life. It has since grown to include movies (a Kickstarter-funded documentary, Inocente won the Oscar this year) music (singer Amanda Palmer's Kickstarter-funded album made its debut at No. 10 on Billboard) and a red hot tech product (the Pebble smartphone watch launched in February). ![]() Kickstarter founders Charles Adler, left, Yancey Strickler and Perry Chen.(Photo: Robert Deutsch USA TODAY) Now, as Kickstarter approaches 40,000 successfully launched projects, and other crowdfunding sites compete (hello, PledgeMusic, Indiegogo and GoFundMe) the Kickstarters are outgrowing their space. They're preparing to move in June to bigger digs in Brooklyn, where they'll keep a keen eye on growing the business. "Our jobs are to come in here and make the site a little better every day," says Kickstarter CEO Chen. "We have no interest in ever selling this business or IPO'ing. We're as independent as you get." Along with physical growing pains comes the price of success. As Kickstart-ed projects become more widespread, backlash — a "Kickstarter fatigue" — is starting to emerge, as folks who once didn't mind pitching in are now finding funding requests as bothersome as the frequent political and charity pleas that clog e-mail inboxes. Additionally, the requests are getting much closer scrutiny. Recently, a Maryland mom helped her 9-year-old daughter stage a Kickstarter campaign to "support girls in tech" by raising $800 to help her create a video game. But after the request brought in more than $20,000 in pledges, it drew scrutiny — and more than 1,300 generally nasty online comments. A Kickstarter member discovered that the mom was a tech entrepreneur and could easily afford to send her daughter to the summer camp where she was going to make the game. Still, the mom, Susan Wilson, hasn't sworn off Kickstarter. "I truly believe real innovation over the next decade will come from regular people leveraging advances in technology to empower themselves to come together and create BIG CHANGES in the world," she wrote on her daughter's Kickstarter page. "I still believe in the power of the crowd," she adds, telling USA TODAY: "The crowd is smart enough to figure things out." KICKSTARTING ITS OWN LAUNCH It was that same crowd that inspired aspiring musician Chen in 2001, when he was living in New Orleans. He tried — and failed — to raise money to put on a concert and thought: "Wouldn't it be great if we could raise the money online?" By 2007, he had met Strickler and designer Adler, and they decided to join forces. In raising money for launch, the founders turned to family and friends. That was later augmented with $10 million from venture capital firms and notable Internet investors such as Twitter co-founder Jack Dorsey and Flickr co-founder Caterina Fake. Kickstarter, which takes a 5% fee off the top of every funded project, was profitable within its first 12 months. Now, there are many crowdfunding sites. The founders aren't bothered by this — they say they're happy that many people are able to realize their dreams. "The goal of Kickstarter is for people to be able to make things and bring projects to life," says Strickler, head of communications. "Not necessarily for it to be on Kickstarter." The site began with a simple project, an artist offered to draw something, which raised $35. Now it has grown to multi-million-dollar projects, such as Veronica Mars creator Rob Thomas's recent headline-grabbing revival of the TV series. Thomas wanted to make a movie of the series that got canceled in 2007. With little interest from corporate owner Warner Bros., he decided to see if he could raise money directly from fans. "I figured I had nothing to lose," he says. Within 10 hours, he surpassed his initial goal of $2 million, and has since topped $4.4 million. Production will begin in June. "I was shocked how fast it happened," says Thomas. Mars is now at No. 3 on Kickstarter's list of most-funded projects, following No. 1 Pebble Watch ($10 million) and $8.5 million for Ouya, a video game system with free trial games that is scheduled to make its debut in June. Thomas is thrilled that he was able to get his passion project off the ground, but says anyone looking to Kickstarter as a quick end run around the system is mistaken. "This has been exhausting," he says. "A much simpler process is to go in as a writer and pitch a movie, and hope the studio buys it the old-fashioned way."
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