The platform has infamously hosted several campaigns started by users trying to gain attention rather than raise money for a genuine cause. This, along with the vague regulations about who can ask for funding, what types of projects can be funded, how fake projects can be identified, and how to eliminate illegitimate funding are some of the ethical concerns associated with the platform.
Kickstarter was launched in Brooklyn, NY on April 29, 2009 by Perry Chen, Yancey Strickler, and Charles Adler Perry Chen came up with the idea while living in New Orleans, when he wanted to raise funds for a popular band to come play at a Jazz festival. Chen reached out to Strickler when he moved back to New York, but the two were moving slowly in their development. They eventually reached out to Charles Adler to help improve the website of what was then Kickstartr. After more developments, the three were able to make the site live in April of 2009. The company had seven full-time employees at the end of 2010. The site had one million backers through different project campaigns by the end of 2011. Their first project to raise one million dollars in funding, Double Fine Adventure, did so in early 2012. In 2014, the company had over 70 employees. 
It gained notoriety quickly through the press because of its simplified crowdfunding process and massive earning potential. It raised over $10 million in funding from investors like Jack Dorsey, Thrive Capital, and Chris Sacca as well as 16 others. Once a web-only platform, Kickstarter released an iPhone app of the same name in February of 2013 to bring backing projects into the hands of consumers everywhere. It has continued to grow and is known as one of the staple crowdfunding platforms in the world.
Kickstarter was so unique in the first place because it allowed everyday people to become investors in potential companies before they are real companies. Before platforms like Kickstarter arose it took a lot of money to invest in any kind of business. Now with Kickstarter's staggered backings and rewards, anyone can theoretically invest any amount they want into a company and receive benefits in gifts rather than equity.
Kickstarter applies a 5% fee to raised funds (but only if the project’s goal is reached), as well as a 3-5% fee for the payment processing. However, project owners keep 100% of their work and Kickstarter owns none of it.
Projects & Statistics
Kickstarter has facilitated over 100,000 successful projects for a total of $1.91 billion in pledged funds to those projects to date. This is out of 283,000+ potential projects with a 36.19% success rate among projects on the site. Kickstarter has seen steady improvement in participation both from project developers as well as backers each year since 2009.
There have been several milestones along the way for Kickstarter. In 2012 they reached their first project with over $1,000,000 pledged ($1,464,7076 pledged of a $75,000 goal) for an iPhone dock called Elevation Dock. Since then there have been three projects that have broken the $10,000,000 in pledges: Pebble Time, The Coolest Cooler, and Pebble: E-Paper Watch. Most successful projects on Kickstarter however earn between $1,000 and $9,999. While not all projects are successfully funded on Kickstarter – meaning that the creators will receive none of the pledged funds – 78% of projects that raise at least 20% of their goal are originally funded.
Controversy on Kickstarter
Most of Kickstarter’s campaigns are created by honest people looking for a way to break into the industry and get their name out there however possible. Some people, however, have attempted to take advantage of the system and exploit Kickstarter's access to potential backers. In the summer of 2014, a man started a campaign to raise $10 to make a potato salad. The ridiculousness of the request gained attention online and donations began to pour in. The pledging topped off at around $40,000 when it ended. Many accused him of exploiting the system, requesting him to donate the money raised to charity.
While some campaigns set realistic goals for their projects and meet their funding requirements, there are ethical issues about what the company can spend its money on and when it has to deliver its product or service to its backers. These scams usually spend a lot of money on photography and video editing for their campaigns. Since there are no Kickstarter rules on when to deliver a product, many of these campaigns come up with reasons for shipping delays and product development while they spend their newly acquired money. An example of one of these campaigns is iBackPack. They promised that their product would be able to charge devices, hold photography equipment, and serve as a wi-fi hotspot. They raised over $720,000 in 2015 alone. After they reached their goal, they dropped all communication with their investors and stopped releasing updates. While these campaigns may be enticing, they should be viewed as an investment, and you may not receive what you were expecting.
Other notable controversies occur when celebrities turn to the crowdfunding platform to raise money for their own ventures. Notable program names like Veronica Mars and Zach Braff’s Wish I Was Here received scrutiny because many believe big names like these keep eyes off of the indie artists and creators the website was initially designed to help.
Is this really crowdfunding?
Kickstarter is mainly known as a crowd funding platform, used to reach goal amounts of money for business investment. However, as it has progressed over the years, it has become less a crowd funding platform and more as a pre-order store . Crowd funding is the process of raising investments from a large number of people to reach an ultimate goal . In the article, it references the Kickstarter campaign of Pebble, which was able to raise over 20 million dollars with over 80 thousand investors. If that many people are interested in a product, the kickstarter campaign could have been used to create hype around the product, and less of a crowdfunding venture. Since so many people were intrigued by the product, it seems like they wouldn't have needed that much money from random outsourcing. This is not against the rules, but rather sheds light on other uses of kickstarter, some that could possibly interfere with information ethics.
One blatant ethical issue stems from the open nature of the creator role. In 2013, controversy emerged from Zach Braff’s campaign to raise two million dollars for a movie that he could have funded alone. While this could pose the question of whether or not there should be stricter regulations on who asks for funding, many creators use crowdfunding campaigns to measure market demand, and prefer to crowd fund to establish a closer connection with their base.
When referenced against Mason's four main ethical issues of the information age, Kickstarter measures weakly on two levels: Accuracy and Accessibility. Kickstarter is designed to be a very transparent system. Creators start a project, backers fund it, and then backers are supposed to get updated on the progress of their project and receive whatever their reward was for backing. Ideally, this system wouldn't produce too many problems.
Very often, Kickstarter projects are unrealistic and don't plan for failure. They are incentivized to continue to provide positive updates to their base, as negative updates lead to angry fans and bad press, and so may intentionally misrepresent the status of their project. Mason describes Accuracy as the responsibility for the authenticity and fidelity of information and Accessibility as the kind of information someone has the right to have. With Kickstarter, the two go hand in hand. Kickstarter is a democratized and accessible platform for creators, and so cannot possibly verify the authenticity of every single one of its thousands of projects. Instead, power rests in the hands of creators to not misrepresent themselves, and in the hands of the backers to verify the information they see. Kickstarter, however, is not an investment platform. Once a donation has been made, it doesn't get returned -- it is simply a donation. Therefore, Kickstarter creators don't hold as much accountability as venture-backed startups or public companies do, and will often take advantage of that, leading to low Accuracy of the page, and low Accessibility for potential backers. In October 2015, a campaign to create a "laser razor" raised $4 million through the platform was finally banned after the creators of the program couldn't create working prototypes to satisfy the production requirements. 
Kickstarter uses a company called Stripe to handle their payment processing. This includes credit cards mainly but in 2015 Stripe made it possible for its users to pay through Bitcoin. While Bitcoin is an up and coming payment method for use online, its uses in other realms of the web could raise ethical issues for its use for Kickstarter. Kickstarter has a community of founders and backers and it is quite transparent. However, with the addition of Bitcoin there could be the possibility that backing could come from suspicious sources.
Kickstarter has also grown into a space where people will start projects to help pay for their medical bills. While this ethical implication is not necessarily the fault of Kickstarter, their platform does enable it. Kickstarter, along with other crowdfunding websites, found that medical-related projects were one of their largest income streams. Sites such as HelpHopeLive and YouCaring were created to specifically meet this demand.  Even worse is the fact that taboo or stigmatized conditions pertaining to addiction and mental health have a far tougher time raising funds than genetic disorders, diabetes, or cancer. There is less sympathy for mental health related illnesses as some people view them as the result of poor or immoral choices. Regardless of the condition, it is widely agreed that people should not have to resort to begging online just to survive. 
Kickstarters provide proof of virtual trust. Virtual trust occurs when online users place themselves at risk to another user. Donators trust that the money that they contribute to the fundraiser will be used to fulfill the promises of the fundraiser. When campaigns fulfill their promises and distribute optional perks of the Kickstarter they reward the trust of the donators. It had been speculated that online trust was impossible to establish, however the popularity of kickstarters are evidence to the contrary.
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- Mason, Richard O. “Four Ethical Issues of the Information Age.” MIS Quarterly, vol. 10, no. 1, 1986, pp. 5–12., www.jstor.org/stable/248873.
- Paul de Laat (2005) "Trusting Virtual Trust" Ethics and Information Technology https://www.researchgate.net/publication/225329496_Trusting_Virtual_Trust