Crowd Funding: Is it Worth Pursuing ?
We’ve all seen the news lately: crowd funding platforms like Kickstarter and IndieGoGo have been used to raise millions of dollars for various projects. People have funded films, video games, television shows, books, albums, and new technology. Consumers are paying to fund products that do not yet exist so that they can get a copy when they do, even if this eventual existence isn’t guaranteed. For a business owner or someone working on a creative project this might all seem too good to be true. There are questions hanging in many people’s heads. But most people just want to know this about crowd funding: is it worth pursuing?
How much money do you need and Why ?
This is a more complicated question than you might think. It all depends on what kind of project you’re doing and how much money you’re looking for. The more money you need the harder it will be to procure it, and if you fall short of your funding goal, you usually don’t get to keep any of the funding you raised at all. The exception to this can be found with IndieGoGo’s flex-funding campaigns that let you keep whatever you raise, but people are more cautious about donating to these because there is a greater chance that they will lose their money on a project that never comes to fruition.
Let’s assume you’re looking for a reasonable amount, though. Something in the neighborhood of fifty thousand dollars is pretty low, as far as most crowd funding efforts seem to go. But, even with this relatively low goal there’s no guarantee to your success. Everything about your campaign needs to be carefully constructed. Take the campaign’s video, for example: it’s far more likely that you’ll fail without a video to explain what you need the money for, so you’re going to have to get people together to shoot one and to edit it. The video needs to convince people to give you their hard earned cash, so it has to look good. You might end up having to spend money making such a video before the campaign even starts, and if the campaign fails then you’re worse off than when you started.
Then there’s the language you use on the campaign’s page. It can’t seem like you’re begging for donations or like you’re desperate. You need to seem confident that the project will come to fruition, but you can’t seem so confident that the money seems unnecessary. A popular angle to work is that of a creative artist who doesn’t want to sell themselves out to a bigger corporation to get their project done.
But that kind of thing only works on certain projects and it brings us back to the question of what you’re working on. If you’re working on a film then you’re going to have a harder time, as they don’t seem to fund as easily. Games and technology seem to do much better, but they also require much more money to be realized.
Is crowd funding worth it?
Only if you can put in the time and effort to run a campaign for a month with the risk of losing everything at the end if you even fall a dollar short. It can make you millions over night, or it can leave you more broke than you started out. As with any loan or funding, it needs careful consideration and planning.
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