The Fundamentals of CrowdfundingReading Time: 9 minutes
Crowdfunding by definition: It describes the collective effort of individuals who network and pool their resources usually via the internet, to support efforts initiated by other people or organizations.
There are many forms of crowdfunding, but we’re going to advise on creative crowdfunding, the type of campaigns you would see on Indiegogo or Kickstarter such as music, dance, photography, and more specifically; film.
In 2012, I embarked on a crowdfunding campaign to raise funds for my web-series Grim: A Tale of Death. The goal was set at $16,000 — the bare minimum needed to get the series off the ground and start shooting. Grim eventually raised $19,200 – 120%
Crowdfunding sites are popping up all over the web. The two most popular to use are Indiegogo and Kickstarter. While essentially the same thing, particular crooks, and crannies turn differently, advancing or compromising your project. For example, Kickstarter campaigns only receive their funding if the campaign reaches their goal if the drive does not reach the goal the funds do not get dispersed to the campaign owner. With Indiegogo, there is an option to receive the funds even if you do not complete the campaign, but this comes with a more substantial fee.
Initially, a campaign owner would opt for Indiegogo as you will receive the money no matter what. But in your backers’ mind-set, they may be more tempted to back a project that has to reach its goal as it does not, they will not lose any money. However, if you opt to receive funds anyway and the project has another $10,000 to raise within seven days, people may be a little bit more pessimistic about backing you as you could fail, not be able to deliver the full project and still have their money.
Other incentives to look into is that Kickstarter uses Amazon payments alongside debit/credit cards, while Indiegogo uses PayPal. Are more of your target audience likely to use PayPal or Amazon?
The final area to look at for choosing a platform is that platforms reach. Currently, Kickstarter has 518,000+ fans on Facebook, while Indiegogo only has 74,000 fans. Kickstarter is ranked the 690th most popular site on Alexa.com, and Indiegogo is only the 2,331st. There’s a clear winner of which website is the most popular. If you get Project of The Day on Kickstarter, it will be seen by so many people, and your project may go well over its goal.
However, as Kickstarter is so popular, the competition will be a lot fiercer, which may make it almost impossible to get that slot, especially if someone famous is campaigning at the same time as you.
We went with Indiegogo and was a project of the day numerous times and also appeared on the front page.
If you hated math class at school, you would hate the research. You will need to go over; those god awful pie charts, bar graphs, tables, data, numbers, audience algorithms things us creative people should stay away from. You need to know who will back you, why, when, where, and how. More hours were put into research than were put into the campaign, and I campaigned for 18 hours a day.
The first part of the research is understanding your audience, and if you do not have one at the moment, now would be the time to start building one. Having 3000 fans on a Facebook page does not mean you are going to get 3000 pledges.
If someone has an extensive fan base, it does not mean you will have instant success. Take Freddie Wong. One of the most successful channels on YouTube. At the time of his campaign, they had over two million subscribers! But they only raised $273,726. Even more, they only had 5661 backers. That is 0.28305% of their subscriber list. Although they did smash their target as they raised 364%, if I were Freddie or Brandon or another producer of VGHS, I would be sure that I’d be close to hitting the million margin. Only 50cents each from one backer… But that was not the case.
For two years, coming up to three, I’ve been building an audience on our Facebook page. In an oversight, the audience building has been quite slow, but I have not gone around asking random people to like the page or wanting other pages, so they like ours. The page has been spread online with a simple message of asking people, and to take a look if they are interested, please like the page.
Since November 2010, we’ve only acquired 1379 fans. That is around only two fans a day. When taking into account the friends of those on board who have liked the page to support us. The amount of “fans” we have started to dwindle. I would say only 800 of the fans on Facebook have liked the page because they are genuinely interested in the show. Now remove the inactive accounts and those who have left Facebook, and the number is even smaller. For our goal, that would mean getting 650 people to pledge $25, that is a lot of money.
Find out why your audience members have become a fan of your project and what other entertainment they like and have a look at what vibes the other films have created and seen how you can adapt some of their techniques while retaining your creative identity.
If you reach 25% of your mark, then there’s a 90% chance of hitting all of it. Several factors contribute to that statistic; One is that if you show enough determination to see your project through that far, you are going to put in the effort to carry it all the way. Another reason is that typically you gain enough supporters and key influencers to help you reach more people. It can be looked at as a tipping point or critical mass. It also puts you in a position for a critical backer/investor with a large sum of money to come to the rescue if need be. This happened to my campaign, we had plenty of grandiose backers, but a Rich from America and a Rich & Samantha from South Africa undoubtedly brought the drive to a home run.
It is easy to fall in the trap of thinking your campaign will be successful when pledges are rolling in left right and center, but remember that 55% of Kickstarter campaigns fail to make their goal. Your campaign will rocket in the first couple of days, pledges from friends and family then it will swoop right down into no man’s land, this is where your research will pay off if you can get out of this area. The first 50 to 60% of backers will likely be tied to someone in the production; it is in the last 40 to 50% where strangers jump on board.
“It’s lonely at the top. 99% of the world is convinced they are incapable of achieving great things, so they aim for the mediocre middle-ground. Thus, the level of competition is fiercest for “realistic” goals, paradoxically making them the most time- and energy-consuming. It is easier to raise $10,000,000 than it is $1,000,000. It is easier to pick up the one perfect 10 in the bar than the five 8s.”
Do You Need A Video?
Taking 1000 different project that has completed funding, projects that have had videos have a success rate of 54% ones without has had a success rate of 39%.
But what do you put into video? Try to keep it short and sweet and under 3 minutes. Try not to list off your rewards and try not to make it like a story. Though, as I stated, each campaign is different, and we broke all of these rules and had a 5-minute video and gave it flows much like a story. But that helped us emphasize that what we were doing is making something that is a story in its heart.
“Your campaign is more than your campaign video – Your video may be so dynamic that it fuels a successful campaign. Once again, I believe that will be rare happenstance. It is going to take more work than your video alone. I cannot tell you how man campaigns I come across where all the effort has gone into the campaign video. That is not going to cut it.”
To sum up this research section, you will also need to work out who on your team is strongest in some marketable regions. This was Grim’s line-up.
- Lewis- Facebook & Twitter the Filmmakers, fantasy forums, gaming forums, online press, local press.
- Jake – The Musicians.
- Rich – the Actors and Martial Arts.
- John – the Youtubers and the online presence he carries.
- Josh and Charlotte – The socialites, Twitter, tumbler, Harry Potter forums, vampire forums.
- Kelly & Mike – General.
- James – Ground force.
Work out when campaigning will be most effective for your given area. Take Josh & Charlotte, who was focusing on the social aspect of campaigning. They were both 17 at the time, and their friends are in that age range, so there would be no point in pushing the campaigning the hardest at noon on a Wednesday as the people they are reaching would be in school.
But make sure it does not stop there if your team has finished their task, have more functions for back up, even though we were all mainly focusing online we still have 500 posters and 3000 business cards between us. Crowdfunding is a fulltime gig; someone has to be on the campaign at all times.
- Cost to Complete Project.
- Project Fees.
- Cost of Fulfilment.
- Minimum goal.
- True Project Budget.
- Crowdfunding Platforms.
- The Campaign.
You really have to plan out the perks, make them unique and at a realistic price, if someone wants $100 for a shout out on Facebook then that campaign is not going to do well if a brand t-shirt costs £25, and you’re selling one alone for £70, people are going to go elsewhere.
“Rewards still seem to be a cool perk, but not such an incentive for people as I thought they would be. I found that if people believe in you and want to see the project come to fruition (in this case, my musical), then they will donate.”
Brandon, who is the director of Hybrid Vigor, had a tremendously successful campaign, and he e-mailed me with a crucial tip that everyone looks over according to him. A call to action, you made your video and your campaign, but you have not told the person on the page what to do, ask them to pledge otherwise the train is leaving, and they will be left behind.
We had to raise $250 a day. Our average was $30… But I never once thought we would not reach our target.
Initiating The Campaign
It is time to go to war. Your troops are in their positions—time to fight for your campaign.
“You cannot be afraid to ask, and you need to find the right time to ask. The balance between those two things is crucial. – HAVE A GOAL AND EXPRESS IT – You need to get the word out. Try hanging up posters advertising your campaign in coffee shops or on campuses.”
Reach out to the communities, if your project is about battling wizards find every harry potter and lord of the rings fan online. Remember to keep in touch with anyone who backs you, if it’s by following them on twitter or sending out updates, they are part of your team now, they are helping your baby grow, and you cannot leave them in the dark.
Twitter is a powerful tool but be creative when tweeting, “Help fund my film www.indiegogo.com” is a bit boring, and it will not catch anyone’s attention. Crowdfunding is a known initiative now, and just like how people do not respond to charity adverts, they will not respond to that type of tweet, “DUELING WIZARDS IN CRAZY COATS AND BEARS www.indiegogo.com” is much more exciting. Use a hashtag when you can and remember to leave some space, some people like to RT and add their input “DAVE CHECK THIS RT DUELING WIZARDS IN CRAZY COATS AND BEARS”.
If you are using Facebook posts effectively and try not to spam, you want to inform the Facebook page or your friends what is going on and how they can help.
There are no short cuts with this; you genuinely must put in the work, Ryan from nofilmschool.com said – “Crowdfunding is a full-time job, every day we need to be spreading this link, this link is our life. – I understood this commitment from reading about how others handled their campaign… but I still was not prepared for its realities. Working on gaining exposure and new eyes every day was extremely time-consuming. Think of it like placing a media ad and having it in heavy rotation — but you are doing it yourself and not relying on an agency. I spent at least 4-6 hours every day on the campaign — if not more.”
If you see another project and it is doing well, similar to your style, check out and see what they are doing and put it into your campaign. If you are campaign is spread out over 40 days, and you have an arsenal of ideas to initiate over this period, you are going to want to wait for critical moments to use some of them. Each week we had a different means to get out to the public who were not in our range on the internet, from the local newspaper to the radio and then even to the national press, in a dying moment John pulled out his trump card of contacting a famous YouTuber which gave us a little boost for that week.
Entice the backers you already have by offering stretch rewards. Essential this is an extra perk backer will gain if you reach a particular milestone over your goal. You can go so many routes, but remember, you must keep at it always, never give up, and, most importantly, believe in yourself.
Of course, luck can come into it. In my group of friends, I happen to have a professional actor with a large fan base, and a creative genius and friend to the show Andrew Schar was the one who introduced Rich to the campaign.
Hopefully, this information has given you a better insight into crowdfunding and remember when your campaign is over it does not mean you stop; there’s an extensive list of perks to being sorted out and believe me as we are all creative people and not the dispatch team of Amazon it can take some time to sort out.