IndieGoGo and Kickstarter - Two Ways of Financing Your Film By Reaching Out to Patrons Online

IndieGoGo.com and Kickstarter.com are two sites that offer similar methods for funding creative projects (like indie films) via a website that helps connect aspiring artists with patrons.

IndieGoGo launched in 2008 to "address the fundraising challenges and market inefficiencies affecting independent media."

At its simplest, IndieGoGo provides a platform for people to pitch projects (before, during and after production) to the world. IndieGoGo is a useful site for aspiring indie filmmakers because it gives fans the vehicle to experience, influence and fuel independent film projects they want to see created. On IndieGoGo users can search projects by country, by city, date posted, rating, funding status, funding goal and percentage reached in their fundraising activities. At the current time, IndieGoGo is not taking equity investment (where the patron can get a return) only donations. And IndieGoGo takes a 9% cut from the funds fans donate to films.

Slava Rubin, IndieGoGo's chief of strategy and marketing, told The Industry Standard that "some projects are getting more than 50% of their funding from people that they don't really know." "It's surprising, the connections that are made."

Kickstarter provides a similar service to IndieGoGo, with one significant difference: On Kickstarter the patrons' credit cards aren't charged until the project has met its funding goal.

On Kickstarter, artists of all kinds (not just filmmakers) can post their projects that are seeking funding. Before they launch their first project, project creators using Kickstarter set up an Amazon Payments account. Every project has a funding goal (any dollar amount) and a time limit (from 1 - 90 days) set by the project creator. If funding succeeds, funds go directly from backers' credit cards to the project creator's Amazon Payments account.

So, using Kickstarter, when the deadline is reached, there are either of two results:
1. Funding Successful: If a project has met or surpassed its funding goal, all backers' credit cards are instantly charged and funds go directly to the project creator. Project creators are then responsible for completing the project and delivering rewards as promised.
2. Funding Unsuccessful: If a project has NOT met its funding goal, all pledges are canceled. That's it. Every Kickstarter project must be fully funded before its time expires or no money changes hands.

Here's a link to a December 2009 page from the NY Times that includes a story about Kickstarter entitled "Subscription Artists":

This summer, Allison Weiss, a 22-year-old singer who writes melodic songs about "hopeless hope," wanted to produce a 1,000-CD run of a new album she was recording, but she wasn't sure how to get the money to do it. Then she heard about Kickstarter, a Web site unveiled in April. At Kickstarter, creative types post a description of a project they want to do, how much money they need for it and a deadline. If enough people pledge money that the artists reach (or surpass) their financial goals, then everyone is billed, paying in advance as you would for a magazine subscription. For goals that aren't reached, nobody is charged.
In essence, Kickstarter offers a form of market research for artists. For perhaps the first time, an artist can quickly answer a nagging question: Does anyone actually want my art badly enough to pay for it? If the goal is reached, the artist now has a list of subscribers to her vision. And if the goal isn't reached? "It's painful, but it's better to find out early," rather than spend precious time and money on a project nobody wants, says Yancey Strickler, who helped found Kickstarter. More than 1,000 projects have been started on Kickstarter since April, raising money for projects as diverse as a solo sailboat trip around the world ($8,142 raised) and a book by Scott Thomas documenting how he developed the graphic design for Barack Obama's presidential campaign ($84,614 raised).
Weiss picked a goal of $2,000, and like many Kickstarter users, offered a clever set of tiered benefits for fans: $40 got someone a signed copy of the album (17 fans paid for that), and for $500, the donor could pick any subject and Weiss would write a song on it. (Two people bit.) Weiss raised the $2,000 in less than 10 hours, and eventually amassed $7,711 from 195 backers, which meant she could pay for more mixing. Perhaps even more important was the validation of her fan base. Weiss says, "I was surprised to find I had a more dedicated Internet following than I thought."
Clive Thompson for the NY Times.


UPDATE: August 7th, 2011 On August 5th, 2011 the New York Times published a great article recapping how Kickstarter came to exist.

1 comment:

James Morrison said...

If a project has met or surpassed its funding goal, all backers' credit cards are instantly charged and funds go directly to the project creator.

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