Crowdfunding is the new financier

Last year, I wrote a column about a website called Kickstarter.com that allows people or companies to fund creative projects before they are complete.

Last year alone, over two million people pledged over $319 million to successfully fund over 18,000 projects. That’s a lot of projects and a lot of money. Of that money, $83 million was for the development of video games.

While we can talk numbers and statistics all day, one thing is standing in the way of you, your creativity and all that cash. Kickstarter.com only works for projects that originate in the United States or the United Kingdom. You can back a project if you are in Canada (in fact, Kickstarter.com claims that there are backers in over 90% of the world) but you can’t start one and receive money. That’s not good.

A recent comScore study (http://bit.ly/155L1ZR) shows that Canadians lead the world in online engagement, spending an average of 45 hours a month online, which makes for fertile ground for digital marketers and advertisers. Smartphones have now reached a penetration of over 45% in Canada and Canadians watching online television continue to grow each quarter. So if we’re so digitally engaged, why are we having trouble funding projects using crowd funding over the Internet?

One possible reason is the looming idea that this type of funding is about to be government controlled. To ensure fair and equitable rules for all, the National Crowdfunding Association of Canada (http://www.ncfacanada.org) has been formed to not only to make sure all angles are covered but also to provide a resource for those interested in the crowdfunding model. According to the site, there is a large funding gap for small business (which is defined as having less than 100 employees) and crowd funding is a viable alternative.

While Kickstarter.com is not an option in Canada, http://www.indiegogo.com is. IndieGoGo promotes itself as the world’s funding platform and works in a similar fashion to Kickstarter. You create your campaign and include a list of rewards for pledges and (usually) a video to explain what your idea or project is. As long as you receive your funding goal, the project completes and you receive whatever funding you have raised. Backers get charged at that time and IndieGoGo keeps 4% for a fee, plus 3% for the credit card charges.

Crowdfunding is not necessarily any easier than gaining other sources of funding. You still have to have a solid plan, realistic goals, and fantastic awards. A website called The Kickback Machine(http://www.thekickbackmachine.com) will help you before you even start with a campaign. It shows you the goals and projects in certain categories and their outcome, which will help you set realistic funding goals. When a project fails it does so because there were not enough backers that contributed enough funds to see the project through. There are many factors, like any project, that go into the success and failure overall.

Many projects have done even better than expected. Have you ever wanted to see a television series continue on at the box office? It’s happened for many series with varying amounts of success. Both Star Trek and the X-Files, for example, have made the leap to the big screen, but it’s more difficult for shows with smaller audiences.

Veronica Mars, a 2004 television show that stars Kristen Bell, lasted only three seasons but has a strong fan base. A recent Kickstarter campaign with a $2 million goal has seen over $5 million raised, which means we will be seeing a Veronica Mars movie and it will be the largest crowdfunded film to date.

At the end of the day, social media and the Internet are being used to reach more people and bring them closer together for common goals. Many dreams have been shattered when money has gotten in the way and now it looks like the impossible could be possible.

What are your dreams? Perhaps there is crowdfunding in your future!

Syd Bolton is the curator of the Personal Computer Museum (http://www.pcmuseum.ca) and the Manager of Information Technology at ACIC / Methapharm. You can reach him via-email at sbolton@bfree.on.ca or by snail mail care of The Expositor.

Source: brantfordexpositor.ca – Syd Bolton

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