“Crowdfunding” is a very popular word. While some may believe this is an easy way to raise money, crowdfunding can actually be a headache: it is a publicly accessible financing strategy, derived from crowdsourcing and micro-financing, to provide individuals with startup cash.
Ideas for projects are often praised, but without funding they cannot be implemented. The various platforms of crowdfunding are a tool to help startup entrepreneurs to convince backers to believe in projects that need financing and to give their support. A startup concept will inevitably be based partly on dreams, but the campaign for its financing must be extremely tough-minded.
For instance, the “Greek Bailout Fund” campaign on the Indiegogo.com crowdfunding platform finished with very weak results (0% of the total amount required), while thousands of more realistic, individual projects find backing and are totally funded on a regular basis. In order to gain insight, let’s go through the challenges that two startup sponsors faced during their campaigns on Kickstarter.
Jessica (Canada): “The bet is mainly to get the backer’s confidence in your project”
The LIBRE campaign for an “intimate documentary about the lifestyles of three communities in Romania which have been self-sufficient for centuries” raised $5068 (target of $5000) from 66 contributors. Jessica is an independent filmmaker, and she found her campaign to be particularly challenging.
Retrospectively, she describes herself as a workaholic during the 3 months of the whole project. A lot of time is required before, during, and after a campaign. Beyond the fact that the choice of the platform should be carefully considered, Jessica highlights her strategy through visual and textual content. “Avoid blabbering and present your objectives clearly, people are giving you real money after all!”
Jessica states that she raised not only the sum needed but got lots of visibility which helped to make her project successful. Before her departure to Romania, Jessica had already been in contact with locals and persons from the Romanian diaspora. Her network was constantly fed with updates and interactions through a Facebook page or email addresses. “The bet is mainly to get backers to have confidence in your project”, notes Jessica.
Her hard work was rewarded, but Jessica admits that most of her backers were family members and friends. She is very thankful today for all the psychological support that she got during the campaign and emphasizes that her documentary created a human chain around LIBRE. For anyone planning to campaign on crowdfunding platforms, Jessica would give a heartfelt piece of advice: “Go further!”
Alex (Romania): “I missed the most important part of my campaign – preparation”
Alex, a young Romanian, moved to Amsterdam last year for MA studies. His enthusiasm and strong motivation to succeed blinded him to realities during the first phase of his campaign on Kickstarter.
His project, Amsterdam Chronicles, is supposed to be a monography of the underground life of Amsterdam communicated through an animated series. Envisaged as a penetrating examination of Amsterdam city life, the intent was to accomplish the project in cooperation with local partners (mainly coffee shops).
During the one-month campaign on Kickstarter, Alex achieved everything needed for his project except the money required to launch it (target of €50 000 foreseen for the first year of project implementation). He raised visibility, got support from various people (like an offer to edit his eponymous book), gathered newcomers to the team, and got worthwhile experience in social campaigning.
“The lesson has now been learned”, Alex says. As there is no undo button on Kickstarter, Alex urges anyone interested in crowdfunding to evaluate realistically the feasibility of the project, the actual amount of money needed for its implementation, and also even the tiniest details such as gifts for backers or daily posts on social platforms.
Alex is now back in Romania and has serious entrepreneurial ambitions. He plans to start a business in coaching by the end of this year with two associates. “Amsterdam Chronicles” is still on the docket for him, and he thinks that he will find a way to turn it into reality one day. It is only a matter of time, and also money. Alex doesn’t exclude a new campaign on a crowdfunding platform in the near future; he would be more ready than ever.
These two examples of projects on Kickstarter may not be representative, but they can give an idea of the paths that a campaign on a crowdfunding platform can take. Crowdfunding platforms have provided effective beginnings for more than 100 000 startup sponsors who have succeeded in obtaining the required financing for their projects, which represents 35% of the total number of campaigns that have been registered on the platforms.
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