Research Question :: Designing A Successful Crowdfunding Project
Joe Brewer
I've started brainstorming some thoughts about design criteria for
successful crowdfunding projects. And I'd like your help scoping out
what users will be looking for in this section. Here's what I've got
so far:
1. How to set your target and timeline
2. Which crowdfunding model works best for your situation
3. How to design the "deliverable" so it gets your community excited
4. Why your story matters (and how to make it better as you go)
Each of these topics will be written such that it guides the reader
through the design process and helps them learn vital skills for
making their project a success. Another section will be written about
how to run the campaign and what to expect along the way.
So here's the research question:
What else do you think users will need to consider when setting up
their project to make it more likely to succeed?
We want this manual to be user-friendly and comprehensive enough that
anyone could pick it up and get all the insights they'll need to run
successful crowdfunding campaigns. So practical knowledge is the key.
Thanks for your help!
Joe
Jay Standish
Ken Cousins
Greg Steele
x -> z^2+c
Joe Brewer
I am seeing the need to explain the following based on what has been
said so far:
From Jay's comment: Be sure to assess scope and scale with your
community in mind. Plan for high engagement using social media.
From Ken's comment: Explain how trust and legitimacy arise, building
on insights into the community one brings to the project
From Greg's comment: Provide guidance on whether crowdfunding is even
the right approach to take.
This is all very helpful for clarifying my thinking about what to
include.
Keep em coming!
Thanks,
Joe
On Apr 3, 9:37 am, Greg Steele <amtrak...@gmail.com> wrote:
> hi everyone,
>
> i'm mostly listening, i have a lot to learn. my project is in the nebulus
> stage. I am wondering if crowd-sourcing is the best way to go? could it be
> organized, better, as a co-op or non-profit. Maybe it should develop
> organically as a hobby or volunteer activity that begins to generate a small
> but growing revenue stream?
>
>
>
>
>
>
>
>
>
> On Sat, Apr 2, 2011 at 7:07 PM, Ken Cousins <ken.cous...@gmail.com> wrote:
> > I recently heard someone complain that too many crowdfunding proposals
> > neglect to show a track record of completed projects, as a way to persuade
> > potential contributors that their money/resources would not be "wasted on
> > amateur hour."
>
> > I suppose this is more likely an issue for larger-ticket projects, but it
> > seems important to have *some* means of communicating the reputation of
> > anyone proposing a new project.
>
> > K
>
>
> > "Find your place in the world, dig in, and take responsibility from there."
> > Gary Snyder
>
Ariel Dougherty
A little outside the specifics of this topic heading, but tangential:
TAGS -- for more delineation from the project makers. (maybe there are 50--more? -- but you can only tag five--so you are not un-necessarily hitting everyone!!) But contributors too could make more refined delineations (but that are not public). So, for example, when a project TAGs: films, gender, history, US -- contributors who have tagged those interests get a notice that a project they might be interested in has come on line.
Of course this would mean changes in platform/architecture at the Crowdfunding sites...... But maybe projecting some needs like this might be mutually beneficial.
I have also been thinking about diversity concerns. We can, I believe, all generally acknowledge that marginalized groups have less access to funds, capitalization, grants etc. How can we as a community--up front--ensure a much more equitable and diverse sharing of the collective resources. What is a plan of action in addressing this concern?
Best, Ariel
________________________________________________________________
Ariel Dougherty advocate 4 gendered media www.mediaequity.org
575. 894. 1844 fx 575. 894. 1845 Ariel...@gmail.com Twitter: MediaEquity
latest piece: Three Feminist Media Principles: Envisioning a Path to a Less Violent, More Truthful Media
Associate Producer:! Women Art Revolution Lynn Hershman Leeson's documentary
on Feminist Art Movement, Premiered at Toronto International Film Festival
NYC premiere at MOMA March 3rd at 6:30; NYC Theatrical run June 1 -7 at IFC Center
Greg Steele
x -> z^2+c
Eldan Goldenberg
* To what extent is it practical / worthwhile to try and recruit new people for a crowdfunding campaign, as opposed to just raising interest among one's existing network?
* How can I gauge the limits of how often I can go back to the same network with incremental campaigns, without causing a donor fatigue problem?
I can see the beginnings of answers to both of those from the discussion on this list so far, which is a very encouraging start.
Eldan Goldenberg
Director of Operations
Sustainable Seattle | 1402 Third Avenue, Suite 430 | Seattle, WA 98101
206.659-8077 | http://sustainableseattle.org/Programs/emergingppi/STARs/
Twitter: S2STARs
Suresh Fernando
http://www.spannerfilms.net/how_to_crowd_fund_your_film
How To Crowd Fund Your Film
This page is a short step-by-step guide to using the crowd-funding model that paid for The Age of Stupid. We hope you find it helpful. If you're not sure WHY you would want to crowd-fund your film, have a look at our Crowd-Funding FAQ.
HOW TO CROWD FUND YOUR FILM IN SIX EASY STEPS
1. Write a Crowd-Funding Budget
First things first. How much money do you need to make your film?
(You can see The Age of Stupid budget here.)
A few small tips on making your budget.
- Don’t kid yourself and be over optimistic with costs. It’ll only hurt more later.
- Always allow ten percent extra contingency in the budget as your project is bound to go over time and over budget.
- Try to keep your budget small.
This is a matter of constant negotiation combined with begging,
borrowing and scrimping over the course of the production. At the
budgeting stage lots of the costs will be unknown but the best way to
keep the budget small is to pay the crew low wages and sign them up to a
deferred profit scheme instead. We paid all our crew about £60 per day
as a survival rate and they deferred the difference between that and
their typical full fee. So an Editor who is usually paid £1,500 per week
would only get £300 per week in the hand (5 days at £60 per day) and
would defer the other £1,200 each week. Whereas a Production Assistant
(who would conventionally get £600 per week) was paid £300 on our film
and then deferred £300 per week. Then we tracked each crew members pay
to see how much they have deferred overall (weeks worked multiplied by
amount deferred each week) and used this to work out what percentage of
the profits each crew member is entitled to. Our film cost £450,000 to
make but the crew deferred over one million pounds so if we didn’t have a
deferred pay system we would have been forced to raise an extra million
pounds. (There’s a really sweet added benefit because when you do
eventually make a profit and you pay your crew back they are pleasantly
surprised as they worked on the film because they believed in it, rather
than for the money, so to get extra payments later is a real unexpected
bonus).
- Don’t scrimp on quality. It’s fine to eat
crap food but don’t take shortcuts on equipment. Get the best quality
cameras / laptop / edit machine you can afford. You’ll have tonnes of
technical problems anyway so you don’t want to be slowed down by boring
computer /camera issues.
- Claim the Producers Tax credit from the government.
You can get twenty five percent of your budget paid back to you if you
apply successfully for the Producers Tax Credit. You have to certify
your film as British (more here), be intending to have a theatrical
release and then include extra information about whether expenses
‘qualify’ under the tax credit rules or not in your end of year tax
return. It’s a difficult, and bureaucratic process
to get through but
well worth it when the Inland Revenue sends you the cheque! (Necessary
to work with a professional accounting firm for this and the whole
process has to be audited independently.)
Once you know how much you
need to raise, you can work out how many investors, each contributing a
standard sum, it would take to make up the full amount. How much does
the minimum investment sum need to be, and what are people going to get
for their money?
The question of what percentage of the profits they get for their cash investment is crucial. Offer a bad deal to investors (ie too little percentage for too much cash) and nobody will put money in, but offer a great deal to investors (lots of the profits for not much cash) and you’re short changing yourself, your crew and your production company.
Our Investment levels:
STAGE MINIMUM NO OF ‘SHARES’ TOTAL RAISED
Stage 1 £500 100 £50,000
Stage 2 £5,000 40 £200,000
Stage 3 £5,000 40 £200,000
Final £10,000 15 £150,000
Raise the stakes as you go along. Obviously it’s much more risky to invest at the beginning of the project, when there are so many unknowns including if the film will be any good or even be finished, than at the end when people can see the film. To reflect this we upped the price of ‘shares’ as we went along.
For Stupid, the initial "unit" of investment was £500 - but that
was when the film was nothing but some scribbles on a bit of paper and a
twinkle in Franny's eye. Once the game was truly afoot and the
production underway, the minimum investment sum was raised to £5,000.
Now that we’ve finished people are paying £10,000 for the same
percentage of profits they could have brought at the beginning for
£1,000.
Our Percentage Profit Levels
STAGE MINIMUM % PROFITS
Stage 1 £500 0.05
Stage 2 £5,000 0.25
Stage 3 £5,000 0.25
Final £10,000 0.10
It is quite challenging to administer paying all the
individual investors back - more than a couple of hundred and you could
find yourself buried under the paperwork so you need to be super
organised at every stage.
Donating - Always offer
the option of donating rather than investing. Some people are not
interested in getting their money back and this is the brilliant for you
– money without any strings attached.
Syndicates -
Individuals who couldn't raise the necessary cash themselves clubbed
together to form syndicates and invested that way. In this instance it’s
important to be clear with the syndicate that there will be one named
individual who essentially buys the ‘share’ and who you deal with as you
don’t want to be dealing with different people from one group. We
suggested that syndicates have a letter or contract between their
members to formally detail the agreement. You definitely don’t want to
be dealing with groups who have fallen out or lost contact with each
other for years to come.
Altogether, a total of 258 individuals and
groups invested in The Age of Stupid. Any investment bought an on
onscreen credit and a small percentage share in any profits. At one
stage, when we were desperate for cash we offered people who invested
£5,000 the chance to star in the film (no one was actually interested in
this but you see but creative you can be with what you exchange for
investments) You can read more about exactly what our investors were
offered in our Crowd-Funding FAQs, or in the Crude Funding Plan which
you can download at the bottom of this page.
2. Download our documents and adapt them for your project
At
the bottom of this page you can download the various Funding Plans for
the project, right through from Stage 1 where the minimum investment was
£500 to the final round where the minimum investment was £10,000. You
can use this as a model for writing up a Funding Plan for your own
project, and then use that as the basis for your inspirational
presentation pitch to potential funders (see 4). It should give you a
really good idea of the kinds of things you need for a persuasive pitch.
You can also download a generic loan agreement letter at the bottom of this page. This is the legally binding document that sets out each party's obligations to the other. You'll need to go through it and enter the details of your project - it should be obvious where your details need to go. It's a UK-based, London-centric agreement that's designed to work with English law, so if you're not in the UK there may be additional changes to make before asking investors to sign it.
Suresh Fernando
BLOG, YOUTUBE, OK WEBSITE, OK FAN PAGE, OK GROUP, OK-WE, PHILOSOPHY, TWITTER, FACEBOOK, WOTW FAN PAGE LINKEDIN, SLIDESHARE
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