So, you have an awesome idea. It’s creative, it’s unique and best of all, you’re pretty sure people will want to pay for it. So what’s next?
As an independent creator, or even a small business owner, you have options about how to fund it. The explosion of crowdfunding platforms has been a boon for independent creators all over the world.
For the last decade or so crowdfunding platforms have allowed creators to fund their dream projects, giving them access to support without having to seek a loan or other traditional means of funding. It’s a huge industry—crowdfunding platforms pull in $17 billion every year in the US.
What could be better than the chance to fund your dream project through a network of supporters and true fans, especially if you feel like your “product” doesn’t fit into the niches of usual VC-funded start-up money or grant-funded projects?
But crowdfunding your dream project is a lot of work, and you’re competing for attention in a sea of other incredibly inventive ideas. In order to really be successful, you have to hustle and be your own marketing director, distribution specialist, and customer service manager.
Our guide will show you best practices for how to stand out in the crowd, help you figure out which platform is best for your great idea, and outline the basic protocols behind what makes a successful crowdfunding campaign.
We’ll help you plan everything from ultra-shareable promotional materials and irresistible rewards, and how to build a fanbase of supporters ready to give you their dollars to let you do something awesome!
Before doing anything else, you’ll need to decide which crowdfunding platform is best for you. Here’s our Quick Study guide outlining four major crowdfunding platforms that feature creative work—Kickstarter, Patreon, Seed&Spark, and Indiegogo.
While every platform is different, there are definitely some best practices that relate to all of them—especially when it comes to figuring out your goals, and setting up your crowdfunding page in a way that makes people want to smash that “support” button!
First things first. Laying down some goals and timelines will help you get clarity on what it will take to meet at least your minimum financial and project goals. And it’s tough to get that recipe right. You want the perfect mix of reaching for the stars, but also knowing what is attainable—and achievable—for you as a creator to produce.
Here are some questions to ask yourself when starting to think about how to get your crowdfunding project off the ground:
Scope: What’s your end goal? Obviously, you want to create your project/film/podcast/album and get it out in the world. But how much do you need for what you want to do? Consider everything from capacity, labor, expenses and fitting it all into your budget.
It’s about time: Timelines are going to look different depending on what platform you choose: crowdfunding campaigns with fixed timelines include Indiegogo (up to 60 days), Kickstarter (5 weeks) and Seed&Spark (30-65 days, though 30 days is recommended).
But with something like Patreon which is more of a membership platform, you're going to want to plan continuous, regular content—almost like with an editorial or social media calendar. Patreon recommends you go with a monthly campaign versus a per-creation one, and to do at least four pieces of content per month.
If you’re a filmmaker, you know the importance of the pre-production phase—this Seed&Spark timeline guide recommends prep work for your crowdfunding campaign start at least one month prior.
No matter what your creative field, making milestones, meeting deadlines, and planning ahead are key components of how you can survive (and win!) in the crowdfunding game.
But it’s NOT all about the money: You’ll want to think about other goals your crowdfunding project can help with—like making connections, developing an audience or fanbase for your work, and building a community. Think about your secondary goals as icing on the cake if you reach your crowdfunding goals, and a nice consolation prize if you don’t.
That same study on top Patreon earners found that success is correlated with image uploads, social media links, descriptive summary text and a video. Other research has shown this to be true across most crowdfunding platforms.
Here’s some of the main components of creating a crowdfunding page you’ll want to focus on making awesome:
Visuals are important: No matter what your creative endeavor, picking the right images and photos to make your page pop is crucial. You’ll need a logo and images for: your project, your rewards, and your updates. Experiment with backgrounds, styles and colors and if you have a product or a reward, be sure to show all dimensions of the object as well as it’s packaging.
The Write Stuff: You’ll need to describe your project, introduce yourself and your team through bios, create enticing reward descriptions, generate compelling updates, write thank you notes, and send out press releases. Use the story formula to create an interesting narrative for your project: what problem does your project solve?
Make a Video: Including a video on a Patreon landing page can increase conversion by up to 80%. On Kickstarter, projects with video succeed 50% more than 30% for those without. And Indiegogo says campaigns with an intro video raise 4 times more than campaigns without one.
Here are 3-5 basic best practices for making an intro video that looks polished and professional. We’ve even embedded some examples from local successful campaigns so you can see what we’re talking about!
Even if you’re not a filmmaker, it’s great to think like one here—imagine the intro video being a trailer or teaser for your idea, product, or campaign.
And even if you can’t afford a fancy film crew and have to shoot your video on your phone, pay attention to things like lighting, camera steadiness, sound quality, and editing.
Her authenticity, and also vulnerability, are what gets people to relate, and get excited to go along for the ride!
Almost each crowdfunding platform we’re covering in this guide uses a rewards system, which uses incentives at various levels to get people to donate..
Different platforms use different lingo for their reward systems and supporters:
Kickstarter uses rewards, which you can set at various levels (they recommend five). People who support your project are called backers.
For Indiegogo incentives for supporters are called perks. You can set your featured perk, and even add “secret perks” for super special supporters (also called backers).
At Seed&Spark, you have supporters who back you financially, but also followers—anyone who clicks the follow button to get updates about the project. Rewards on Seed&Spark can only be unlocked when certain follower milestones are reached.
At Patreon, tiers are essentially membership levels, and at each tier, benefits are offered. Tiers come with different levels attached to suggested price points: entry level ( $3-5), mid-level ($10-20), and high-level ($30 or more). A similar concept to Seed&Spark, Patreon divides fans from patrons (members who financially support your work). The idea of course, is to get fans to become patrons.
Not sticking to a budget or taking into account all of the ancillary costs is how a lot of businesses fail—and a lot of crowdfunding campaigns too.
Setting your tiers and pricing your rewards is another balancing act—you want to be realistic (ie, setting a low bar to increase your chances of success—especially with time-based campaigns), but you also don’t want to underprice your hard work (a common creative’s mistake).
Cover your expenses: When making your budget for your crowdfunding campaign (a must), consider overhead, labor, and shipping and manufacturing costs if you have a product to offer. Do your market research on similar campaigns and projects to find out why they succeeded (or failed!).
Build in extra funds for producing rewards, payment and processing fees, and advertising costs (if any) into your budget. Set up your minimum funding goals, as well as your stretch goals (what will you offer/do if you meet your funding goals).
Give ‘em the Good Stuff: Rewards, perks, benefits—these are the incentives, the goodies, the magnets which draw people in and also may make the difference between a fan deciding to become actual backer, or pay at a higher level than they would otherwise.
When the campaign is for an actual product, that makes choosing your rewards easy. But for other creative projects like films, podcasts, and music, you'll have to get creative with your rewards to make them into something tangible! (Or not, you can also do one-of-kind tours, event tickets, exclusive sneak peeks, AMAs with the artists, and other experiential type rewards).
Here are some examples of great rewards for non-product campaigns from different creative projects across Washington State:
- Bellingham animator Andrea Love offered tote bags, pins and water bottles decorated with images from her stop-motion animation film, Tulip. At the higher pledge levels she offered art prints, digital perks like exclusive streaming, and 2 limited edition felt flower bouquets.
- All My Relations, a Washington State-based podcast by Indigenous creators about how Native peoples are portrayed in the media. Since their podcast is free to listen to, they’re offered other rewards for regular support like an exclusive newsletter, behind the scenes photos and videos, and the ability to pitch show ideas and guests to the producers.
- Grit City Magazine in Tacoma offers invites to release parties, social media shout-outs, and a chance to get your name in the print edition as a supporter.
You’ve done all the prep work—picked your platform, figured out your project, made a budget, determined your rewards and levels, made an intro video, and uploaded images and descriptions onto your crowdfunding page. Congrats but...you’ve only just begun!
It’s time for the most exciting day—launch day! But wait—there’s still a few more things to do. It’s a good idea to get some early backers from people in your close network—good friends or family. According to Indiegogo’s guide, early backers bring 25% more traction to a campaign’s first 48 hours.
Here’s a handy Launch Day Cheat Sheet, a checklist that’s general enough to apply to any crowdfunding platform—but specific enough so that you won't miss checking any pre-launch day boxes!
What’s your “pitch”? Finding supporters, engaging them, and keeping them interested in your project is key. Research shows that creators who facilitate active promotion reach successful outcomes for both current and future campaigns.
In a way this should be easy. You’re excited about your project—so others will be too! But it’s also a challenge since most people feel flooded with information and asks as it is.
Here are some things to think about when cultivating a support community for your project:
Who are your ‘people’?: The grain of your future fanbase starts with people you already know. You can ask them to help support, spread the word, and find other supporters. You’ll also need to branch out past your people and do some market research to figure out who to target: who is your audience? Who would be most interested in what you have to say/create/sell?
Spark Interest: Creating multiple ‘entry points,’ or ways people can find and get to your project is a great strategy. This includes thinking about where your target market hangs out, in real life and in the digital realm, and also being creative and consistent with your communications.
Seattle artist Happy D posts about her Patreon products and sales on Instagram, giving a glimpse of behind the scenes, but also letting supporters know that Patrons can get special deals.
Have a marketing strategy: Just like any business would, create a solid marketing strategy to reach out to press, plan social media posts, and build relationships.
If there’s one thing we learned talking to Washington State crowdfunding creators, it’s that running a crowdfunding campaign is a full time job. And across platforms, everyone we spoke to said, success or fail, it was much more work than they expected. (Ok, that’s two things—but they relate!).
Unless you're working in a team, you'll have to wear all the hats: being a creative director, an arts administrator, a PR agent, and a distribution manager.
Here are some important points to prepare for the financial considerations when crowdfunding:
Keeping your promises: When you receive funding from supporters, it's like entering into a contract. If your campaign is successful, you’re expected to deliver the rewards or incentives as promised in a timely manner. Most crowdfunding platform’s Terms of Service state creators are legally obligated to fulfill their rewards or offer refunds if they can’t.
Tax obligations: Yes, you have to pay taxes on what you've raised with crowdfunding and it must be reported as income. For fixed campaigns, it’s the year you receive the funds, and for monthly or continuing campaigns, it’s when you earn it. The IRS requires crowdfunding sites to send a 1099-K to anyone who makes over $20,000 or has more than 200 transactions per year.
Even if you didn’t make that much, there still may be tax implications. You may owe sales and / or income tax in your state. If you registered as a business you may be able to deduct some expenses from the campaign.
Crowdfunding can offer an alternate path to start-up funding that’s different from the traditional VC (Venture Capitalist) model. VC funds often have more selective criteria for potential start-ups and restrictive rules on what to do with the funds once they’re received.
Equity crowdfunding is a hybrid between crowdfunding and VC investment, where ‘the crowd’ becomes the potential investors to an early-stage start-up in exchange for shares or a stake in that company. It’s a little riskier in that there's no ‘refund’— investors can lose their investment if the company fails. But at the same time, it opens up the pool of investors to people who are more than hedge-fund managers.
Crowdfunding itself is just like any other creative endeavor—if it succeeds, it's a launching pad, and if it fails, it's a lesson.
We've given you the basics—how to figure out goals, products and pricing, making your crowdfunding page pop, getting attention, eyeballs, and dollars—and now it's up to you, brave creative! Turn that idea into a reality, and have fun along the way.
