Crowd funding is defined as “the collective cooperation, attention and trust by people who network and pool their money and other resources together, usually via the Internet, to support efforts initiated by other people or organizations.”
This new funding source has created some businesses to try and help you meet that goal. The two most popular are: 1) IndieGoGo and 2) Kickstarter.
They both will charge a fee for doing this. IndieGoGo will allow you to be funded regardless of whether you hit your goal or not in the allotted time. If you do not make your goal, you simply pay a higher premium. With Kickstarter, it’s an all or nothing deal. If you don’t make your goal, you simply do not get funded.
For the indie filmmaker, many see this as a great way to get started. I have a few thoughts on the issue, having gone through this ourselves recently. We chose to go with IndieGoGo
1. You need to recognize you are simply going to be tapping your own personal resources. There are not thousands of people waiting in the wings to find your project and fund it. You will find a few new people, but the majority of funds will come from your own personal network of family and friends. And if they've all ready been tapped for resources, it’s somewhat hard to ask them to dig deep again.
2. Filmmakers need to STOP asking for the entire budget. I've seen one guy asking for $90,000 on Kickstarter. This is a crazy amount of money to be asking for through crowd funding. I don’t believe you’re likely going to raise these funds this way. Money at that level would have to come from a true angel investment campaign, which is very different. Crowd funders are not investors! They are giving you the money for whatever little incentives you might offer. Generally, true investors who invest significant money will want some agreed upon investment return and time-frame for the risk they are taking. Depending on the level of an “investors” investment, you also may possibly violate some SEC regulations. Now, someone will always have some exception to the rule—I get it. But, you need to stop and set realistic and obtainable expectations. You need to ask yourself, what it might mean if we don’t raise the funds. It’s great when you do, but it broadcast “failure” if you don’t. (FYI, the filmmaker only had $10 donated of the $90,000. I was not inclined to give, as I knew there was no way he was going to meet his goal through crowd funding).
Now, maybe that’s the point: as with Kickstarter, your go/no go is based upon you reaching a hard to obtain goal. But, you need to be ready for what failure might mean.
What crowd funding can be good for is a specific piece of the puzzle, such as seed money or having it go towards a specific budget item. Our crowd funding was for a campaign to help us market our film, www.TheFellowsHipMovie.com, properly. We were successful. We couldn't, and did not, raise the entire budget through crowd funding.
3. Don’t expect help from the service to advertise for you. They have so many projects that they only assist in advertising a select few. And, from our experience, I’m not sure the method to their madness. From time to time, an idea is so good it starts to catch on like a brushfire and gets well over funded. That’s what we all would like, but it’s the exception to the rule, not the norm.
Crowd funding has its place, but keep your goals realistic and achievable—and fair to you and your funders.
Now go and Express your Indie!
