How to Win at Crowdfunding
“To make a film all you need is a girl and a gun.” Jean-Luc Godard
‘To fund a film, all you need is a girl, a gun, mouse and a megaphone.’ Bianca Goodloe
Everyone knows, to get the girl, you have to bring something to the table. In this case, it’s money. Crowdfunding shouldn’t be your first source of money. You need to instill confidence that your film project will be completed, and there is no greater validation than independent funding sources already committed to your film.
Also, when setting your funding goal, don’t confuse how much money you’d like to raise with how much you need to fund your project. Regardless of your crowdfunding platform, the funding goal should be one that you’re confident you can reach and exceed. People love to back a winner. Aim to surpass your funding goal by 100 percent in the early days of your campaign. This will help attract additional backers.
“Don’t bring a gun on stage unless you plan on using it”- Chekov
The most effective crowdfunding campaigns are those that solve a real problem (documentaries, sequels, message movies, goals beyond making your films). This greater goal, be it altruistic or economic, helps impassion people, and passion is a great mobilizer. The least effective campaigns are those that have a goal, but cannot clearly communicate it. In a world of sound bites and tweets, you need to grab the consciousness (and often, the conscience) of the on-line community with brevity, boldness and precision. Say it. Mean it. Shoot it!
Given that Kickstarter has attracted more than five million contributors pledging close to $1 billion, funding more than 55,000 individual projects, and its rival Indiegogo has helped raise over $12 million in pledges for a single campaign, which is better?
Indiegogo takes 4 percent of your earnings if you reach your goal and 9 percent if you don’t. Kickstarter is all or nothing. If you don’t reach your goal, no money is exchanged, but if you do reach your goal, you get the full amount minus 5 percent.
Personally, I don’t like to see clients "almost there" and lose it all on Kickstarter. Unless you have a committed “gap funder” in place, in case you don’t reach your funding goal, I recommend Indiegogo, but the choice is yours.
Besides fundraising platforms, filmmakers need social media platforms to profile raise their projects. No one said you must be ubiquitous. Instead, pick the right platforms according to your project. For example, a documentary on the fashion icon Diane Vreeland would lend itself to Instagram, while a feature about skateboarders would get more traction on YouTube or Vimeo. A cooking show for foodies may find Pinterest as a useful fan source. There is no cookie-cutter plan for social media; you have to find what appeals most to your specific audience.
Also, build the foundation for your mouse trap in advance of your campaign by releasing teasers, bloopers, storyboards, etc. on Facebook and Twitter. This will aggregate a portable audience that you can later introduce to your crowdfunding launch.
Your goal is to raise 25 percent of your funding within 24 hours, which will get you featured on the homepage of Indiegogo or Kickstarter. To achieve this, make your perks creative and your minimum donation as low as possible. Research shows that when people are offered the chance to donate one dollar, they will be more likely to donate ten or twenty. Positive re-enforcement like posting daily public thank yous to the most recent donors (always including the link back to the campaign) helps get more donations. Who doesn’t appreciate a personal shout out? If people choose not to donate, encourage them to repost the link instead. Exclude no one.
If you are offering perks in exchange for the donations, make sure they are attention grabbing. This energizes supporters and assures fans that the project will be equally as innovative. I’ve seen people offering a Wake Up Call or a Personalized Song. Even a FaceTime session with cast or crew. Do not, however, accept donations in exchange for walk-on parts (ie. employment). Paying for employment is strictly prohibited by (among other labor code provisions) California Labor Code Section 450. Also, be aware that the exchange of perks for donations is not only a taxable event, but also it is not tax- deductible by the owner.
Finally, if you are offering swag, the donations you raise must be accounted for as gross or adjusted gross proceeds from which you will owe guild residuals and participations. This is because these funds are not considered gifts or investments, but rather are advances for the finished products (DVD, merchandise, etc.), and are considered receipts.
Megaphone, Part Two:
Turn that megaphone around and use feedback you receive on the crowdsourcing and social media platforms as consumer feedback. A majority of the clients we represent have said that the feedback they get is 10-fold more valuable than the money they raised. You can even offer a survey to donors with a choice of A or B having to do with the project. This involves them directly with the finished product and also gives you direct insight into the consumers’ tastes.
Bonus Tip: Be aware of Equity Crowdfunding Coming to a Portal Near You!
Under the proposed rules, Title III of the Jumpstart Our Business Startups Act (JOBS Act) will transform and democratize the film investment landscape by creating a new class of investor: virtually anyone. Projected to go live in the third quarter of 2014, this will allow film projects essentially to IPO.
Take time to understand the various crowdfunding choices for both issuers and investors to be offered by the different online portals coming to a screen near you.