G’day Creative Person,
So you want to do something great, make something marvellous, invest in your ingenious ideas, use your creativity to help the world….. but you don’t have the funds? You’re thinking crowd-funding?
Choice! Crowd-funding can turn your creative dreams into a reality.
I’d thought I’d do a blog about crowd-funding, as I’m often asked how I crowd-funded my 3rd & 4th albums. I’ll share some tips, ideas, dos & don’ts to help you embark on a successful crowd-funding campaign. I don’t have all the answers, this is certainly not the be all and end all; just some pros and cons of my experience, and hopefully they can be of assistance for getting your creative dreams up and running.
Definition: Crowd-funding is where a bunch of people (friends/fans) pre-buy your product or financially support your to get your creation happening.
How’s it Work: You set up a “campaign” online (Pozible, Kickstarter, other crowd-funding site, etc). You have a target and a deadline. When you go through Pozible, you don’t get ANY funds unless you reach your target in the time frame (other crowd-funding sites may do it differently). You have rewards/products for supporters to purchase (eg. CD, artwork, movie, jewellery, whatever you’re making). The combined purchases fund your goal. And BOOM, you have the funds to get your creative dreams into action!
Background on My Campaign:
The Making of Album #3
Aim: to raise $10,000 to help fund the making of my 3rd album.
Time limit: 90 days (July-October 2012)
Crowd-funding site: Pozible.com
I was itching to create a third album with my newest tunes, something full, inspiring, interesting, polished, with top-notch musos and production. It would cost at least $15,000 to get the album recorded, mixed, mastered, pressed, and made in a pretty package ready to be released into the world. I had the songs but not all the funds to get them out into the world. After witnessing fellow musicians run successful campaigns I decided to give crowd-funding a whirl to raise the money needed for the album.
Before launching my campaign I researched crowd-funding, attended a crowd-funding workshop, talked with successful campaigners (kudos to Sam Buckingham – successful pozible campaigner/ muso – who guided and inspired me), supported other campaigns to view their progress and learn from them, bounced ideas off friends and fans, and checked out other campaign profiles to evaluate their videos, rewards, strategy, etc.
By the 3 month deadline, fans pledged $12,000 for the album. 2 weeks later I was in the studio recording the 12-track album with the producer I’d been aching for! March 15 I released the album, named Hero in Me and wen ton to make a video clip for the title track of the album.
The support from friends, family, fans and strangers was incredible. It starts off with an idea you’re excited about, and soon you have many people on board, excited, buzzing, the project snowballs and they help make your dream come to life! I couldn’t have done it without their support. Amazing!
You can get your dream happening too!
FAQs about Crowd-Funding
Which crowd-funding site should I use?
I used Pozible. But there are many: GoFundMe PledgeMusic, Kickstarter, ask around, there are others. Check out the sites, compare their policies, and make the decision that’s right for you and your project.
What are the fees?
Pozible takes 5%. BUT there were some other “hidden” fees I didn’t QUITE expect.
I equated 5% of $10,000 to be $500. Sounds right…
But I didn’t realise there was also GST, credit card fees, AND paypal fees.
I raised $12000 and $1000 of that went to fees.
When deciding on your goal, consider these fees and leave a little buffer for them.
Is the money taxed?
Yes – it should be claimed as your income. Talk to your tax dude.
Why not apply for a grant instead?
Granted (excuse the pun) I’ve never actually applied for a grant. But after hearing stories from successful and unsuccessful grant applicators, I decided on crowd-funding instead.
Things to think about when considering crowd-funding vs grants:
- Crowd-funding puts YOU in the driver’s seat to say how much, when, what, how, etc, rather than conforming to strict guidelines of grants
- Grants are very competitive and limited in number – many more grants are unsuccessful than successful
- You might have to wait months to find a grant that suits your project
- You have to wait furthermore to find out if you’re successful – this can impact your timeline
- Grants = stacks of formal paperwork – before, during, and after your project
- Perhaps grants are great for pushing you out of your comfort zone, developing new skills and directing you into areas you didn’t consider
- Crowd-funding gets you interacting with your fans, realising how much your creativity adds value to their lives, and gives them a platform to get involved in the creative process and journey, support you, give AND receive. This strengthens your relationship with your fans.
- Applying for a grant = boring, tedious and compliant; crowd-funding = the sky is the limit, do it your way!
What if I did it on my own, without a crowd-funding site?
Sure. Why not? Melbourne band The Twoks successfully funded their album creating their own crowd-funding kinda campaign and selling products to fans.
Advantages of doing it yourself:
- You cut out the middle man: there’s no GST, hidden overhead fees, credit card fees, or percentage to pay a crowdfunding site. 100% goes to you.
- You can accept payment in cash, direct debit or other forms that crowdfunding sites don’t offer
- You receive funds immediately and you can start your project
- You can create your own deadline (or not)
- You get funds no matter whether you reach your target or not. This however, could make it hard for you to keep your promise of delivering if you don’t receive the target
- You’re in control, fully, there’s no one to report to, or telling you how to do it.
Advantages of using a Crowd-funding site:
- Reputable sites are more trusted; your fans will be more inclined to use them
- You have an easy online interface to set up your profile/campaign
- You get promoted on the crowd-funding site – reach more audience
- The idea of a deadline to get funds creates excitement and urgency
- Everything is documented for you and in the one place – how much people spent, what reward they selected, their contact details, whether payment was approved, thus easier to keep track of
- The site creates an easy system to communicate with all your supporters – contacting them individually or as a group update
- Crowd-funding sites provide support if needed
- There’s no fear of “funny business” – it’s clear what your motives are, how it works, it’s all on the table, documented, etc.
But isn’t crowd-funding just greedy? Sure, I’ll get all my friends to pitch in for my private jet to Hawaii.
Crowd-funding isn’t about funding your next holiday. It’s about getting the funds to create something that ultimately is a contribution to the world. You’re not getting money for nothing. It’s a pre-paid method of funding your creation. “For $30 you’ll receive a signed copy of the new album.” So YOU get the funds and when you’re done creating THEY get the goods. Some supporters may opt to receive no reward, which is amazing to know they support you, but be sure to show them your gratitude.
But what if no one pledges… and my campaign is a big flop?
You can’t go into your campaign thinking this… or you will end up talking yourself into it. If you believe you have something to offer the world and you just need to find the funds to put it out there, then get excited about your project and other people will too. Let the snowball effect begin. You can do it!
What timeframe should I set for my campaign?
Pozible gives you a max of 90 days. I chose the maximum for my campaign, thinking the more time the better – that I could get word out to more people, build hype support. However, at a Melbourne crowd-funding workshop, a successful campaigner raised the same amount of money in only 30 days (1/3 of the time). The thing about drawing it out is that there is a “U Shape” trend of enthusiasm from supporters. According to other speakers from the workshop, statistics show that most of the funds are raised within the first 48 hours and last 48 hours of the campaign. All the time in the middle can really drag – for you and the supporters. And from the point of view of the campaigner, it can be hard to maintain enthusiasm, hopefulness, and drive, when no one is pledging cos you’ve been promoting it for 2 months already. Either way, choose the timeframe that is right for you.
DOs & DON’Ts
I hope this is helpful.
If there are other questions I haven’t addressed, shoot me an email [email protected]iddle.com. But remember, I’m one little person with one little experience. There are more ways to do things. Be creative, step outside the square, research how others have done it.
Go get ‘em!!!!
Feel free to leave comments, ask questions, share experiences with others.