"Power to the people!" Entrepreneurs and creative types of all stripes lacking that deep-pocketed Daddy Warbucks in the wings have taken their projects to the people in search of funding and the results have been surprising. The increased popularity of crowd-funding has given dreamers big and small a chance to pitch their idea to their communities, the nation and the world and make a connection. The hope is that this connection leads to cash. In many cases, that's exactly what has happened.
One of the most popular crowd-funding sites is Kickstarter,
founded in 2009 by Perry Chen, Charles Adler and Yancey Strickler. Projects are placed on Kickstarter with video, images and a detailed explanation and funding goals are set. Anyone can donate anywhere from one dollar to $10,000 but the trick is, if the funding goal isn't met in an allotted period of time, no money changes hands.
"Our site is geared to help people get funding for their ideas, without having to go begging at banks or boardrooms,"
Strickler said last month. To date, Kickstarter has
helped raise more than $50 million for more than 20,000 projects nationwide including films, tech projects, albums and books.
It takes a village... and 8-10% off the topHere's how it works: You create an account and submit a project proposal. Kickstarter
accepts art, dance, film, music, photography, publishing and theater projects as well as a host of other creative projects that people can get behind. You set a goal and include a number of mandatory rewards that backers can earn through contributions. These rewards range from signed prints for art projects to invitations to exclusive celebrations. Rewards are the key to the crowd-funding process - making benefactors feel a part of the project.
Once a Kickstarter project goes live, anyone can sign up and donate. If funding goals are reached, Amazon Payments processes the transaction and distributes the funds to the Kickstarter project in a timely manner. Kickstarter takes 5% off the total and Amazon takes another 3-5%.
Kickstarter's premier project to date raised close to one million dollars for
a project integrating the iPod nano into wrist watches. You've probably heard of the Robocop statue proposed for Wayne State University's TechTown campus, which
successfully raised $67,436 from 2,718 backers.
The benefits of crowd-funding are being felt locally as well. A number of Kickstarter projects have launched in Ann Arbor and Ypsilanti – some successful, some unsuccessful and seven ongoing (as of June 3). In the month of May alone, three initiatives were successfully funded in Ann Arbor.
Every little bit helpsTwo of the food carts in the new open-air food court,
Mark's Carts, received funding through Kickstarter, with The Lunch Room raising more than $10,000.
Phillis Engelbert and Joel Panozzo planned to build The Lunch Room cart from which to sell their vegan fare, setting a goal of $8,000 to pay for start-up items including building materials, a refrigerator, hot water heater, and even the kitchen sink.
"My first exposure to Kickstarter was through a successful project completed by
Common Cycle," says Panozzo. "When I knew we were starting The Lunch Room, we debated whether to use Kickstarter or design our own site and opted to go with Kickstarter."
Finding the balance between a cautious and ambitious fundraising goal can be difficult. Many Kickstarter projects fall on the conservative side to increase the odds of the goal being met.
"We chose a fundraising goal that we thought we could achieve but one that wouldn't fund the entire project," says Panozzo. "We'd already put a decent amount of our own money into the project but needed the Kickstarter funds to really get off the ground."
Photographer Erica Hampton used Kickstarter to fund her Ypsi Project Exhibit – a series of 100 portraits of people living in Ypsilanti.
"I needed the Kickstarter funds mostly for the prints and rewards," says Hampton, whose exhibit debuted in May 2010.
"Most of my backers were in the community. I communicated regularly with my supporters and tried to fulfill the rewards as soon as possible."
Rewards are one of the biggest hooks of Kickstarter. The more a benefactor donates, the more each reward is worth – like a more creative NPR fundraising drive. Hampton's rewards included everything from an Ypsi button for a $15 pledge to a signed 16x20 matted print from the exhibit for a pledge of $400 or more. The Lunch Room doled out magnets, t-shirts and of course plenty of food, though they're still working on fulfilling all their rewards.
"A lot of our backers have already stopped by the cart to claim their rewards," says Panozzo, "but three people who pledged $500 or more get a menu item named after them. We want to wait and see which items are most popular and see what fits them best before putting anything in stone."
Kickstarter has also helped local musicians cover the cost of recording and producing their albums. Folk duo Nervous But Excited surpassed their $6,000 goal to fund the recording of their third full-length studio album using their shows, email lists and social media to get the word out.
'
"We got help from some folks we knew and some we didn't," says Kate Petersen, one half of the band. "We got a few $250 pledges but a lot of people supported us with $20 and $50. Of our 110 backers we knew about half of them."
Not all projects are as fortunate. Detroit music producer Freddie Brooks tried using Kickstarter to acquire the funds necessary for the synchronization license for the music in a documentary about rock band MC5 but raised just over half the funds needed to make the project successful.
"The biggest challenge proved to be the all or nothing funding policy - the possibility of doing a lot of work and having nothing tangible to show for it," Brooks writes in an email. "On the positive side, we were able to connect with a significant number of people who absolutely love the film, expressed their continued support and strongly encouraged us to try again. This isn't a matter of if, it's a matter of when."
Brooks launched a crowd-funding drive on IndieGoGo, raising more money in the first 36 hours of the project than in the first 30 days on Kickstarter, though still $20,000 shy of their $25,000 goal as of June 3.
Everyone interviewed agreed that the key to raising funds was to get the word out that the project existed and make a connection with the community.
"I didn't want to be annoying but you need to remind people every single day," says Hampton. "Funding hit a plateau for a while but we kept posting and made our goal."
"We did press releases midway through the project and got picked up by blogs and a few vegan specific sites," says Panozzo. "Complete strangers popped up giving us $50 or $100. One complete stranger gave us $500."
"Be real and be yourself," says Peterson. "People are excited to support independent art. You're asking people for money so put your best foot forward."
Richard Retyi is the former assistant director for Athletic Media Relations and social media at the University of Michigan. He writes a biweekly(ish) column for AnnArbor.com called "Lie to Your Cats About Santa" and has a cool new blog called InBedByEleven.com. His previous article for Concentrate was Ann Arbor Retail Cannonballs Into the Social Media Pool.
Send feedback here. Find us on Facebook here.All photos by Doug CoombePhotos
L to R : Sarah Cleaver and Kate Peterson of Nervous But Excited serenade Kate's dog Maisy.
Phillis Englebert inside the Lunch Room trailer
Joel Panozzo outside The Lunch Room in Mark's Carts food court
Amazingly Nervous But Excited did not use Maisy in their Kickstarter video pitch.