An artist, nonprofit group or entrepreneur looking for money to launch their project or business have more options than just going to a bank or asking relatives for a loan.
Web-based crowdfunding, on sites such as Kickstarter and indiegogo, has matured from a novel fundraising tool into a vital resource for thousands of businesses and artists. On Kickstarter alone, more than $350 million has been pledged by more than 2.5 million people, funding more than 30,000 creative projects.
But if you don’t know how crowdfunding works, you’re not alone. That’s why the Center for Emerging Entrepreneurs, a joint effort between Illinois State and the Economic Development Council of the Bloomington-Normal Area, is hosting a DIY Crowdfunding seminar on campus October 30.
In a nutshell, sites like Kickstarter provide an avenue for a project creator to promote their work and ask others to donate money, loan them money, or (coming soon) become a full-fledged investor.
Here are some tips from Illinois State alums who’ve tried crowdfunding:
1. PROMOTE, PROMOTE, PROMOTE
Colin Snyder ’09 had a video game controller in his hand before he had a full set of teeth.
Colin Snyder ’09. (Photo by Alex Reside ’10)
He came to Illinois State and studied graphic design, his work heavily influenced by games. After graduation, he landed a job at Rockstar Games, working on well-known titles such as Grand Theft Auto: Episodes from Liberty City and Red Dead Redemption, plus some indie projects on the side.
Now, Snyder and other game designers and filmmakers are making What’s in a Game? It’s a video series that will explore topics such as the economics of video games, their aesthetics, depictions of women and the art of building worlds – all meant to inspire people to become more engaged with games as a medium. After plans with a partner website failed to work out, Snyder’s team kept shooting footage but turned to Kickstarter in hopes of buying equipment, paying for travel and rental fees, and bringing on additional crew members.
As of Monday, they have 307 backers on Kickstarter, pledging $7,321, almost halfway to the goal of $18,000, with about a week left in their fundraising campaign.
Snyder said first-time Kickstarters should be realistic and reach out to the media before you launch. The video games blog Kotaku has brought in nearly 18 percent of the “What’s in a Game” pledges. Snyder also recommends project creators aggressively promote their campaigns on Facebook and Twitter.
“We knew how Kickstarter worked when we signed up. We did our homework,” said Snyder, also creator of a social network, Gameifesto, that’s a matchmaking service for aspiring game developers. “We were hoping to raise money faster, but Kickstarter has reached a critical mass now where there are a lot of projects to back, so it’s hard to stand out or get the press to write a story for ‘another Kickstarter’ project.”
2. GIVE YOURSELF TIME
Megan Stroech, M.F.A. ’12.
Megan Stroech, M.F.A. ’12 recently wrapped up a successful first Kickstarter campaign, getting $2,195 in pledges from 29 backers for her 10-week residency at the prestigious Anderson Ranch Arts Center in Colorado. Her plan is to create a large-scale installation comprised of painted and printed paper with areas of collage.
She doubts she would’ve been able to make the trip to Colorado without the Kickstarter support.
“I got a lot of great reception from people I didn’t even know. That was the craziest part to me,” Stroech told STATEside from Colorado. “I was just so surprised and grateful for that.”
Her advice to first-timers: give yourself extra time to collect your money after the campaign closes. Kickstarter, for example, gives project creators their pledged money via Amazon Payments. But it took Stroech about two weeks to get the money from Amazon into her bank account for her journey west.
“If you have a specific deadline, that’s something you have to keep in mind,” she said.
3. MAKE A GOOD VIDEO
On Kickstarter, one of the largest visual spaces on a project’s page is for a video, often something explaining what the project is all about and why you should pledge support.
Stroech shot her video – a simple 1-minute clip of her speaking, with some background music – on her iPhone. She recommends that first-time Kickstarter users spend even more time crafting a solid video, since it’s so visible and can make a good (or bad) first impression.
“(Shooting on an iPhone) was fine for me, but I think if you kind of have a more detailed project, you might want to get some help with that,” Stroech said.
4. TAKE A STEP BACK
Andrew Gillespie ’11 and another physics student at Illinois State, Anthony Galassi, created Coffee Cereal in summer 2010, combining the taste of coffee with corn flakes. In hopes of growing their company, they set out trying to build a confectionery coating machine with a much higher capacity to produce more cereal.
Andrew Gillespie ’11, who majored in physics and physics high school education, with a minor in mathematics.
They turned to Kickstarter last year and got $1,385 in pledges from 44 backers – two-thirds of them strangers. Now, they’re in the end stages of construction on the machine, and once finished “we will be able to produce a sufficient quantity of our cereal required for a successful product launch,” Gillespie said.
Gillespie says those new to crowdfunding should attempt to view their idea from the perspective of a potential backer, knowing that the most successful projects appeal to a larger demographic. What benefits does your project offer for your backers or your community? Will you offer decent rewards for backers?
“Once you are about to launch your project, find several people to review it. It’s especially beneficial to ask someone who has been skeptical of your idea previously,” said Gillespie, now a Ph.D. candidate at University of Missouri in Columbia. “They may identify important points that you may have neglected to address.”
5. COME TO THE OCTOBER 30 SEMINAR
The DIY Crowdfunding seminar will feature a panel of Bloomington-Normal entrepreneurs who will talk about their experiences in crowdfunding and the mechanics on how to put together a project. Larry Maschhoff, manager of the Center for Emerging Entrepreneurs, will also speak about investor crowdfunding, which is coming in 2013. (A new law will allow small businesses to use the Internet to raise up to $1 million from small-dollar investors to help with start-up costs.)
Maschhoff will also discuss what you should know about fees and taxes related to crowdfunding. The owners of Two Blokes and a Bus, who repurposed a 1958 double-decker bus into a Twin City food truck, will also be on hand to share their experience building a successful $15,000 Kickstarter campaign.
The cost of the seminar is a $5 raffle ticket entry for an iPad 2. Students are admitted free but may also purchase a raffle ticket.
The seminar will be at the University’s Alumni Center, from 6:30-8:30 p.m. October 30. For more information or to RSVP, contact Michele Bock by October 23 at (309) 438-1941 or mfbock@ilstu.edu.
Ryan Denham can be reached at rmdenha@ilstu.edu.
