“To crowdfund or not crowdfund, that is the question.
Whether ’tis nobler in the mind to set out to raise a fortune,
or to make art with a means so humble,
and thereby buck the trend, then…”
Apologies to the Bard, but he, of course had the patronage of well placed aristocrats and possibly the Queen. My merry band of players must strut and fret their hour or so upon the stage with what I have in me pockets. And that, as they say “is the thing”.
I have for some time looked at crowdfunding. I think I had a Kickstarter account within the first few months of it becoming a “thing”. But as yet I haven’t brought myself to actually starting a crowdfund campaign.
In the olden days, if you wanted to make an independent movie, you’d go find a group of people who had money to invest and convince them that your movie would make back more than you were asking for. If they agreed, an attorney would draw up a contract covering the particulars; how much money was invested, what percentage of profits were paid back, and on what timetable, etc. Somewhere in there was usually (hopefully) a statement regarding risk. That is, the investors agreed that even if you made your movie in a professional and cost-effective manner, and got it into distribution, film festivals, DVD sales and whatever, that the thing still might not make enough to cover cost.
Crowdfunding has evolved a bit since the earlier Kickstarter days. There are other crowdfunding sites, and the spectrum has expanded from single finite projects to startup capital, charitable giving, and sustaining patronage. Likewise the return on investment has evolved. But I still can’t seem to get on that bandwagon. I’ve had friends and family successfully use crowdfunding for creative projects, charity donations, and ongoing cash flow. Aside from charity, though, I can’t really get behind the idea.
To me, everything that a crowdfunding site does, is something one could do oneself, and maybe more inexpensively. In early days, a project might have been more visible on a crowdfund site, but in today’s competitive market, the producer really has to go out and find, engage, and funnel potential funding to the site. If I do all that heavy lifting, why not carry it to my own doorstep?
Consider that crowdfunding can cost up to 20% or more of the funds raised, and that doesn’t count any ancillary costs for “premiums” like t-shirts, hats, glow-in-the-dark kazoos and the like. That percentage pays for the servers, the staff, processing fees, and operation of the crowdfunding site. I still have to do the majority of promoting myself. If I process payments through any number of online credit card handlers (Paypal, Square, etc.) I’m looking at 3-5% plus per transaction fees. This is comparable to transaction processing costs through the sites, so I’m not necessarily losing money that way. For accepting investments (it’s not a donation) a simple WordPress blog with an e-commerce plug-in is fairly easy to set up these days, and most fees associated with it are fixed costs (rather than a percentage of sales). Plus, you own it and can use it for other projects in the future.
Now, I’m not entirely against the concept of crowdfunding. Certainly what the sites do is not different from what venture capital firms and other kinds of brokers have done for years – bring the people with the money to the people with the project. And those services always came with a finder’s fee, so nothing new under the sun, someone just wrote an app for it. But I do believe that ambitious creatives need to approach crowdfunding professionally and with a clear understanding of the costs and potential downside. Making it work requires the same skills in marketing and promotion that face-to-face funding does, and the site won’t really make that any easier.