Subscribe to Entrepreneur for $5

Kickstarter Streamlines Its Rules, Becomes Less Exclusive


They say that once you get to the third kid, anything goes. The anxiety of inexperience eases, and you start staying "yes" more and worrying less. Kickstarter, the crowdfunding platform that has firmly established itself as an industry powerhouse, has just turned turned 5, and it's loosening its grip a wee bit.

The crowdfunding site today unveiled new rules for what a project-owner is required to do to launch a campaign and what constitutes a legitimate reason to launch a campaign on the platform.

Related: 'Reading Rainbow' Is Coming Back Thanks to Kickstarter

Whereas previously, all Kickstarter campaigns would have to be approved by a human being, the new rules include an option dubbed "Now Launch," which uses a computerized algorithm for approval. A potential project's description, rewards details, funding goal, and whether the creator has previously launched a project on Kickstarter are among the characteristics that determine whether a project is given automatic approval or not, according to a blog post published today by co-founder Yancey Strickler.

There will still be community managers available at Kickstarter to help campaign owners develop their project, but the new rules allow project-owners more independence. "We want creators to have the support and freedom they need when building their projects," writes Strickler. "We're pleased to offer creators a simpler process for sharing their projects with the world, and the flexibility to choose how much help they need."

Furthermore, Kickstarter relaxed the restrictions it had imposed for what qualifies as a legitimate reason to raise money on the platform. The three rules for what a project must do to live on Kickstarter are as follows: It must create something that can be shared with others, it must be honest and clearly presented and it cannot fundraise for charity or offer financial reward for an .

Related: How This Denim Startup Raised More Than $500,000 on Kickstarter

Before the rule change, Kickstarter prohibited items including bath and beauty products and certain sorts of software. Excluded campaign owners would migrate to other platforms. Kickstarter has removed some of the restrictions that motivated project owners to use other sites.

, N.Y.-based Kickstarter has been feeling some heat as its rival, , has recently raised more than $40 million to grow its international and mobile operations. Indiegogo also just drew in capital from high-profile investors including Richard Branson and Max Levchin.

Even as Kickstarter moves to make itself more inclusive, it still does not allow equity-based crowdfunding. The Jumpstart Our Startups Act, passed in April two years ago, includes provisions that would make it legal for startups to exchange pieces of their company in exchange for cash from nonprofessional investors. The final rules are still being negotiated by the Securities and Exchange commission, but many stakeholders expect to be a game changer.

Even in its shortened code of conduct, Kickstarter continues to hold the line against equity crowdfunding that it has long maintained. "Projects can't promise to donate funds raised to a charity or cause, and they can't offer financial incentives like equity or repayment," the rules read.

Related: Become a Crowdfunding Wizard: 8 Tips You've Probably Never Heard Before.

Entrepreneur Editors' Picks