Intro to Crowdfunding: Kickstarter Cleveland

On Thursday I went to the free Kickstarter Cleveland event co-sponsored by Cleveland Partnership for Arts & Culture and the Foundation Center Cleveland.

Community Partnership for Arts & Culture

Foundation Center

 

The session was led by Kickstarter’s Director of Art Programs Stephanie Pereira who did a great job sharing tips and facilitating an inspiring discussion with 3 local success stories.

The sponsors started by plugging upcoming offerings:

  1. CPAC is about to launch a one stop shop website for Northeast Ohio artists. Check their website, follow on Twitter, or Like on Facebook to get this and other awesome updates.
  2. The Foundation Center of Cleveland offers free training on grants for individual artists at the end of next month.  You can check out their calendar, blog, and find other free learning opportunities on their website (I love getting their eNewsletter).

Let me start with an intro to crowdfunding. I used to sell Girl Scout cookies and hoagies to go on the annual band trip…it’s kind of similar, but instead of incentives and amounts being decided by publishing houses or other institutions, they are now in the control of individuals.  And online.  So now instead of (or in addition to) knocking on all your neighbors’ doors, you can email, Tweet, post to Facebook to spread the love (and solicitation).  Plus, you can make the rewards much more interesting (but keep it legal!).

Kickstarter is a unique crowdfunding platform that specializes in creative projects.  Highlights:

  1. Funding is all or nothing.  If you don’t reach your goal, backers get their money back.
  2. Over $150 million pledged so far.
  3. 20,000+ successful projects (45% of total posted projects).
  4. Fees: 5% to Kickstarter + 3-5% for Amazon.
  5. Most unsuccessful projects get 0 pledges.
  6. Reach 10% of pledges and you’re 50% likely to succeed.
  7. 30% of funding is the tipping point after which a project usually succeeds.

So I can’t match the visually gripping PowerPoint, but here are Stephanie’s tips for a successful Kickstarter project:

Every Kickstarter is A STORY.

  1. PROJECT VIDEO:  If it’s well-lit with good sound, the key is that it is real people connecting with other people.  Here’s a great sampling of a dozen favorite videos from 2011.  The Freaker is super hilarious & not what you think (or maybe it is? did you think it’d be a bottle cozy?):
  2. REWARDS: This is commerce, not charity. Backers are looking for great stuff. The most obvious reward is a copy of whatever the end product is (CD, DVD, game, tickets to the event, etc). Projects also often share momentos from the process, a creative experience, exclusive photos or videos…mostly things that share the story. Ask yourself: would your friends want your rewards?  Or better yet, ask your friends.  Because they’re the ones who will probably back your project.  5-7 reward tiers are ideal.
  3. SET A GOAL.  Here’s some stats to help:
    • Focus on how much you actually NEED & chunk down into how much you can RAISE
    • The average goal is $4,500
    • 50% of successful projects are between $1-5K
    • $25 is the most common pledge
    • $71 is the average pledge amount but it varies by category ($58 for arts)
    • 86 is the average number of backers x $71 (average pledge) = $6,106
    • So multiply $71 x the # of backers you think you can get = $$$?
    • Some big ticket projects are successful, but are rare & usually tapping their existing large fan base.
  4. PROJECT UPDATES: These updates are delivered directly to the emailboxes of your backers.  Your BACKERS start momentum, share it with others, try to get some press or others to post, and try adding rewards or updates to encourage repeat backers.  After project is successful, folks still want to know how the project is going, when are they going to get their stuff, and love getting video & audio right in their inbox.  Also, make sure you fulfill all rewards before trying to launch another project.

So all this information is super useful, but the highlight of the evening was the panel of three local success stories:

Buzz & Growl: Cleveland’s New Fashion Incubator

Make Civic Sexy with Saving Cities (try saying that 5 times fast!) Rust Belt Documentary

Without Words: Moving Against the Sex Trade

I stopped taking very good notes here, but these are the gems of the advice given:

  • Ideal when you have the idea together with a short/specific timeline for funds.
  • Beforehand, build a big favor bank by responding to requests.
  • Ask friends for assistance with videos, photos, etc to make it visually appealing.
  • You may have to start by explaining Kickstarter & how it works.
  • PLAN AHEAD! This is not something you can throw together in two days, or make successful with minimal effort.
  • Send out tons of reminders, and connect as personally and frequently as possible.
  • People wanted to give $$ all sorts of ways, not just on Kickstarter, but you can’t back your own project.  If you host an event or people hand you cash, ask a friend to use their bank account to funnel it to your cause.
  • Get CREATIVE with rewards, but limit the time-sucking options.
  • Expect trouble with postage, addresses, all sorts of things…get as digital as possible.
  • What do people who share your passion really like?  Is there any “fan geek gear” you can offer devoted followers who are “in the know”?
  • Updates make the project last and builds relationships.
  • Most success comes with 30 day projects, limit is 60 days.
  • Best times of year are Spring and October/November when you avoid holidays and summer.
  • Buzz & Growl ultimately run as a “For Benefit”: structured as an LLC, but not with the profit motive.  (Oh, that’s Farrell Ink!! Now I know what to call what I do!!)

1 Comment

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One response to “Intro to Crowdfunding: Kickstarter Cleveland

  1. Great post! I love the idea of crowdfunding. It gives you the money you need and you know if your idea is viable.

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