It's more than a buzzword—crowdfunding can absolutely help turn your creative impulses into finished work. With the two primary crowdfunding platforms, Kickstarter and Indiegogo, set to reach more than $4.35 billion in combined pledges by the end of 2015, it's a real funding option for creatives looking to work outside the traditional film-finding ecosystem. But some things don't change. Getting your film made has always meant you have to be a hustler, and that's still true in the world of crowdfunding. Here are some tips for ensuring your crowdfunding campaign has the best chance of successfully funding your next project.
Be Ready for Commitment.
Sure, you've heard about the potato salad that earned $55,000 on Kickstarter. Maybe that made crowdfunding sound easy. But projects don't fund themselves. Kickstarter did its own research on the potato salad success story and found that a big contributor to its high profile was the amazing amount of press coverage it generated — more than 1,300 news stories mentioned it in the U.S. alone, with more worldwide. If you know how to get that kind of coverage, maybe you should be getting into PR instead of filmmaking. But the bottom line is the potato salad was a fluke, with almost 7,000 backers pledging an average of just $8.03 to keep the phenomenon alive. Unless your film can grab the Internet's imagination in the same absurd way, you're going to have to do a lot more legwork to raise awareness of your project.
Give Design the Attention It Deserves.
You may be a great filmmaker, but are you a great graphic designer? Be honest. Don't lose track of all the ways great design contributes to a positive first impression. At the very least, your film needs an eye-catching title treatment that can double as a logo for your crowdfunding campaign. Rather than saving it for post, make it a priority. You may need to hire a designer to make it happen. But if your Kickstarter page looks great, and if your pitch video has a solid design sensibility, it speaks well to the ultimate visual appeal of your film.
Choose Your Platform Wisely.
Be aware of the rules before you settle on a crowdfunding platform. Kickstarter relies on an "all or nothing" funding model. You set a funding threshhold based on your budget, and if you miss the goal, you don't get any money at all. That model appeals to backers psychologically — people who don't want to give money to an unpopular or "failed" project feel comfortable with thier pledge — and Kickstarter has a dramatic lead on Indiegogo in terms of both web traffic and pledges. On the other hand, Indiegogo can give your project a second life. The producers behind The Other Side of the Wind, the never-completed final film by director Orson Welles, fell (let's be frank) embarrassingly short of their original $2 million goal, raising a little more than $400,000. But because Indiegogo's flex funding model allowed them to keep what they raised, they now have a head start on post-production and a second chance to privately fund completion of the project. The e-commerce experts at Shopify created this "Crowdfunding 101" infographic compiling and comparing data from more than 400,000 campaigns across both platforms.
Do the Math.
This will require some research, some informed estimates, and maybe some outright guesswork. But in order to reach your final goal, it will help to set some smaller goals along the way. You'll want to know the average amount you're expecting your backers to kick in, which will influence the type of rewards you offer them and what dollar amounts you set for the most attractive items. You'll want to have a good idea of how much investment you can expect in the days after the project goes online, and how much will come in in those last nail-biting 48-72 hours before funding closes. Kickstarter says (in the potato salad article linked above) the site-wide average pledge is $77.51, so you could use that as a baseline. Filmmaker Thomas Mai, who has crowdfunded 11 films, claims his overall average donation was $194.30. Mai also breaks down the contribution levels he believes filmmakers can expect to receive as they network more and more aggressively to wider circles. The farther your reach, the lower the response rate — but that reach will be important if you're looking for more than $50,000. Educated guesses at all of these numbers will help you understand quickly whether you're on the right track or not.
The documentary I Get Knocked Down has an active Facebook feed and fan base.
Yes, by all means make sure your friends and family know about your campaign. You can count on a lot of support from that closest circle. But think big, especially if you're looking to raise a sizable amount of money. Your Facebook feed, your Twitter followers, your LinkedIn contacts and more are all potential sources of funding. Work any press contacts you already have. Are you making a science-fiction film? Hit up your favorite science-fiction blogs. (If you don't read any science-fiction blogs, maybe you should think about doing that before you plan to make a science-fiction film.) Likewise, if your project has a political slant, it will help if you're already a valued participant in online communities where similar issues are discussed. But if you're really thinking big, you may need to hire PR or run an ad campaign to ensure you reach the broadest universe of potential backers.
Seed the Tip Jar.
If you've ever worked as a barista, you know that nickels and dimes are not a good look for your tip jar. You want bills in that kitty — even if you throw in your own dollar at the start of the day. Why? People take cues from what they believe other people are doing, so you want them to see green in that jar, not small change. The same goes for your crowdfunding project. If you have friends, family, and associates who are ready to put their money in, don't take their money offline. Take their donation in your online campaign so that all of your visitors can see it. Can you line up a serious investor to throw in thousands or tens of thousands of dollars from the get go? Do it online. You want the first outsiders who visit your project to see that money has already been committed. It'll give them another reason to believe in you.
Play Up Your Talent and Experience.
Are you a successful pro with a long IMDb resume? Great. Link it up. If you're less experienced, make sure you mention your award-winning short film, those funny spots you made for local TV stations, or even those community theater productions you directed. And now would be the time to mention that ace DP who will operating your camera, that design whiz who's handling your art direction, or the local artisan who's designing and sewing your costumes. Your funders will want to know that you, and the people who will collaborate with you, are capable of delivering. Confidence helps. But there's no substitute for a track record.
Make a Great Video Presentation. Sweat the Details.
The video pitch is insanely important. Potential backers want to get excited about your project. You have to give them that opportunity. A quality video presentation will do the trick, and quality is the operative word if you're asking for money so you can go out and be a filmmaker. It will require a serious time investment, and maybe a financial one as well. At Entrepreneur, crowdfunding reporter Catherine Clifford suggests shooting two endings for your video. You'll use one to drive awareness of your campaign before it goes live, and then swap in the other ending after your launch with a more direct invitation to viewers to contribute. Watch the presentation for the Kickstarter campaign for "Kung Fury" to see an example of a filmmaker who proved his chops to backers in less than six minutes — and raised $630,000 to finish his dream project.
Don't Overthink Rewards.
If you've got some ideas for elaborate rewards that you feel mesh well with the sensibility of your project, go ahead and knock yourself out. But don't feel like you have to come up with complicated reward tiers just for the sake of getting backers to come on board. You can also lose a potential backer if they feel overwhelmed by choices and decide to "come back later" and make a decision. Here some ideas for basic reward tiers.
- Screen credit, a call-out on social media, or other thank-you. If backers can buy in at the $1-$5 level, you'll be able to boost your total number of backers, which can be a boon to your efforts.
- The actual finished film. You may want to offer digital downloads, DVDs, and Blu-rays at slightly different payment levels, but it's the 21st century, so a digital download may be sufficient.
- A limited-edition Kickstarter version of your film. This could be an actual "Kickstarter director's cut," a downloadable gag reel with outtakes, or (if you want to get fancy) a signed DVD or movie poster. Just something special that only goes out to your Kickstarter believers.
- Invitation to a launch party or premiere screening of the film. If your budget doesn't allow fancy soirées, you can always agree to having dinner or drinks or even just a one-on-one Skype conversation with your biggest backers.
If you're really stuck, Kickstarter has 96 ideas for project rewards, plus a separate page dedicated to ideas for those one-dollar rewards. Just make quite sure that you keep your expenses under control. Nothing would be worse than planning poorly and realizing that those tchotchkes you promised your backers are going to decimate your post-production budget.
Budget for Your Expenses
Finally, you need to be aware of expenses that will nibble away at your crowdfunding totals, including the cost of manufacturing and fulfillment for your rewards. Don't forget about the fees built into Kickstarter, including a flat five percent of total funds raised plus per-pledge payment processing fees of 3 percent plus $0.20/pledge. And please realize that the money you raise through crowdfunding is generally considered income for tax purposes. This is not tax advice — you need an accountant! — but it may pay off to run your campaign at the beginning of the tax year, allowing you to quickly use your expenses on the film as tax deductions that reduce your liability to (theoretically) zero. Other potential approaches to limiting tax liability may apply in your situation, including accruing the income so that expenses incurred in a subsequent tax year can still reduce your liability, or classifying a portion of your funds received as nontaxable gifts (based on the difference between the pledge and the value of any rewards offered), rather than income.
Topics: Blog Finance General crowdfunding financing
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