Fundraising through Kickstarter - paper for class

Paper 1: Fundraising through Kickstarter

Fashion Entrepreneurship Class Summer 2012

Michelle Paganini

I recently learned of a novel way to fund a creative project through an online company called Kickstarter by receiving a request to consider donating to a project run by a blogger I follow, Ari Seth Cohen.  His site is advancedstyle.blogspot.com, and profiles ladies 60+ years old with marvelous style.  Intrigued, I followed the link to see the details of Ari’s request and his project.  What I found was this profile for his project, which was not fully funded at the time. 

With another click I was able to view a more detailed description of the project, a short video, and what he was offering as a “reward” to donors for varying levels of contribution:

 

I realized what Ari was doing was essentially preselling his project in return for funding – brilliant!  I funded him for $25 and look forward to receiving the video he is producing as my donation reward.

I explored the site and discovered that ideas are posted with a funding goal and a deadline by which the project must be fully funded. Ari’s goal was $35,000.  There is a caveat, if a project is not fully funded by the deadline then none of the money pledged up to that point is actually collected or distributed. It is all-or-nothing funding.  Not only did Ari meet his goal, with the help of 866 backers his project was 158% funded. 

According the Kickstarter website “At this very second, thousands of people are checking out projects on Kickstarter. They're rallying around their friends' ideas, backing projects from people they've long admired, and discovering things that make them laugh and smile. Every project is independently crafted, put to all-or-nothing funding, and supported by friends, fans, and the public in return for rewards. Source: http://www.kickstarter.com/ 7/5/12

The basic steps for launching a Kickstarter project are to:

·      Have a finite (deliverable) well defined project you are ready to act on

·      Brainstorm what to offer as rewards, such as product, limited editions, or a custom experience related to the project. The intention is not that everything is ready to ship on receipt of funding - rather you use the funding to generate the rewards (I call it preselling.)  When will you promise to deliver it by? What will you actually be able deliver within a reasonable timeframe? Your reputation will be established with this first offering

·      Determine the funding goal and deadline

·      Make your own video

·      Build your own project page

·      Determine how you will rally friends, family, potential customers and strangers to your site to fully fund your project by the deadline. Then get in action!

There is a detailed tutorial on how to start a project: http://www.kickstarter.com/help/school/defining_your_project

I want to launch a business making and selling one-of-a-kind bags crafted from recycled jeans.  I don’t need a lot in terms of funding and I see Kickstarter as a fabulous way to let people know what I am up to, test the market, and presell product.

In summary, 24,000 creative projects have been successfully funded through Kickstarter, with backing provided by 2 million donors, and $250,000,000 pledged to projects since the company started in April 2009. TIME magazine picked Kickstarter twice: Best Inventions of 2010, Best Websites of 2011. What an awesome idea!