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People working in the creative industries should be familiar with crowdfunding by now – and if you are not it´s time to step up your game! Crowdfunding is basically when an individual or a team of people put their project on a crowdfunding website to collect funds from regular Joes & Janes within a specific time frame. The amount is up to the funders, as is the amount on the pledge by each individual backer. The funder(s) of the project get the money if the goal is reached although some crowdfunding websites allow the funder to keep the money, regardless of if the goal is reached or not. The funders are expected to give something back to their backers in the form of rewards or recognition once the project/product is finished. The lowest sum of donation might give the backer a thank-you postcard from the funder whereas the highest contribution might be the donator’s name to be listed as executive producer on a film credit list.
There are many benefits to crowdfunding but it has to be said that not all projects are fit for crowdfunding. Also, those who think they can just start a project on a crowdfunding website and wait on their sofa for money to come rolling in – well, they can forget getting some. Some projects never get founded, either because lack of publicity/attention or because of limited interaction between founder and backers. In most cases you need more than just your friends and family to support your project and therefore you need to reach out to strangers for a support.
According to Jeanie Finlay, award-winning British artist and filmmaker, crowdfunding is first and foremost about engaging with the audience, giving as much as receiving. Finlay funded her film Sound it out on Indiegogo, a documentary about the last surviving vinyl record shop in Teesside, North East England. You should expect to use a lot of your time on social media during the pledge as well as afterwards when your goal has been reached to update your backers with information on how the project is getting on etc. In many cases, funders have more than one pledge for their project. F.ex. one could start a crowdfunding pledge for pe-production & filming of a documentary and then another one for post-production. If that´s the case, then engaging with your backers from day one is very important, if you want your backers to continue to support your project in latter stages. Check out previous post about a session at Sheffield Doc/Fest in June; More than just the Money: Unexpected Benefits of Crowd funding.
A Dollar can make a difference
In 2007, less than 100 crowdfunding platforms were available worldwide. In only five years that has changed dramatically and currently there are about 450 crowdfunding platforms in the world according to The Economist. Kickstarter has become one of the leading crowdfunding platforms and has grown stronger and bigger by every year since it´s launching in 2008, with over 27.000 projects launched at it´s site last year. Film (with $32.5m pledged) and music (with $19.8m) were the biggest categories last year. Crowdfunding has proven itself to be a serious business with a lot of people involved, funders & backers exchanging money in order to make things happen.
‘A report by Massolution, a research firm, forecasts that $2.8 billion will be raised worldwide this year, up from $1.5 billion in 2011 and only $530m in 2009’ according to an article in The Economist June 12th this year (more details at the end of this post).
Here are some crowdfunding websites and as one can see, terms & conditions vary.
More info here.
The closest rival to Kickstarter according to the Economist. What mainly sets the two apart is what sort of projects they are open to and the access for funders, Kickstarters’ funders have to be US residents, Indigogo is open to anyone.
Little more than two years old, Sponsume.com is a UK-based crowdfunding website.
More info here.
We Fund, the first crowdfunding platform in the UK, launched in October 2010. It started as a pledge/reward crowd funding website, but soon they will be offering an equity based crowd funding service along side the former one.
Other noteworthy crowdfunding websites include Emphas.is and ManyMade.org. Emphas.is is for photojournalism projects only and the first crowdfunding platform specifically for photojournalism. ManyMade.org is a crowdfunding platform for Nordic artists and entrepreneurs and/or people doing projects in the Nordic countries. There are 8 categories for projects on ManyMade; visual arts, performing arts, literature, music, architecture, design, film and technology. Funders will need to reach their goal in order to get the funding and ManyMade takes 5% fees of successful funding.
The website will be launched August 10th but it opened for submission of projects today, and here you can find the guidelines for ManyMade projects. Also, check out their Facebook page which is updated frequently.
For more info on crowdfunding, check out the following:
Crowdfunding in action – posted on Docs & Film Festivals July 23rd. 2012.
The new thundering herd – Wanted: small sums of money to finance young companies. Click here to invest - The Economist, June 12th 2012.
Crowdfunding – Micro no more - The Economist, January 22nd 2012.
Putting your money where your mouse is - The Economist, September 2nd 2010.
Various articles on crowdfunding related to My Reincarnation, a documentary by Jennifer Fox about a Tibetan master in exile and his relationship with his Italian born son. The project broke all records on Kickstarter, raising more than $150.000 or 300% of it´s goal.
7 Things You Need To Know Before Launching Your Crowdfunding Campaign - article on Sponsume.com.
The 7 Deadly Sins of Crowdfunding - article on Sponsume.com.