Of course the money is used to invest in the startup. That's what startup money is always used for. But typical startup capital comes from investors who expect to receive a share of the profits. Kickstarter gives startups the chance to reward "investors" in other ways, like funding an initial production run or providing rewards of similar value that don't cost the company as much to produce. For example, an author might write an investor into the book, or a theater production might provide a VIP experience with the cast.

Kickstarter is not a charity. They're asking for donations. There isn't even a digital reward, because presumably the app will be free. It's more akin to PBS giving away tote bags to subscribers, but even those subscribers get a discount card supported by local businesses.

The fact that they don't understand the difference creates significant doubts regarding the competrnce and feasibility of the endeavor. I think a FOSS ride sharing app is an excellent idea, but I will not hold my breath for this one.