Securing financing is no easy feat for a business. When traditional measures for raising money are a bust, it is only natural for savvy entrepreneurs to turn to social media sites as a means to raise dollars. This thinking paved the way for Kickstarter, a website that hosts a variety of pre-approved creative projects for the world to check out and donate money to when they are inspired by creativity and ambition.
Kickstarter joins the ranks of social media sites that have evolved into major players within the online entrepreneurial lexicon. What’s particularly compelling about Kickstarter is the array of people and projects using the site to raise money for their entrepreneurial endeavors. Also instrumental is the untapped world of pseudo-venture capitalists who are motivated to help realize creative ideas they’ve accessed in one neatly packaged online destination space.
For example, I first heard of Kickstarter via my dentists, Dr. Steven Cordoves and Dr. Michael Gulizio, who were using the site to gain funding for a TV project they are developing around their practice. Then through my network of contacts on Facebook, I was informed of the now fully funded Revenge of the Mekons, a documentary project that posted a $20,000 goal. I witnessed its success thanks to 301 sponsors who helped the film project raise a total of $35,295.
Most recently I was introduced to the page of the small business, iza trigg, an independent New York handbag company that produces high-end leather bags. The owner and designer, Mary Trigg, decided Kickstarter was the perfect tool to help her raise the production money she needed to complete her debut line. Part of what she found attractive about Kickstarter was the selective vetting process that makes sure projects posted are passionate and well-meaning.
“I like the community of projects and businesses on Kickstarter,” says Trigg who hoped to raise a minimum of $9,000 by February 28, 2011. “On Kickstarter you find people who are seriously looking for support in their creative endeavors. Kickstarter's become the most prominent and effective platform for small, creative projects like ours to raise money. We've put up our own funds to get things from the conceptual through the development phases, but now that we've hit the final leg of the process -- production -- we're met with minimums that make this last mile quite costly."
With thousands of Kickstarter pages gunning for money, how do you make sure your project stands out? To start, you need to build the best page possible.
- The key to a stellar Kickstarter page is a good video. Trigg, in recognizing the importance of a polished video, dedicated some of her budget to hiring a director, David Sauvage, and a shooter, Karina Tautu, to help create this concise and polished video. Their collective goal was to make an emotional connection with the viewers by sharing Trigg's personal story. Projects with video succeed at a much higher rate, Kickstarter literature maintains.
- Kickstarter suggests incentivizing donors with various rewards based on how much an individual donates. With the video the crux of a profile, this type of add-on enhances the page experience for viewers and budding e-philanthropists. Trigg rewards those who pledge certain amounts with gifts ranging from a charm and clutch bag, to a shoulder bag and a framed, signed hand-sketched design sheet -- all from her collection.
- The final important step to a successful Kickstarter campaign is spreading the word. A compelling video and well-written, inviting text on the page are critical, but they’re not enough. Using the gamut of grassroots approaches involving social media and other networking tools are what bring in the eyeballs and checkbooks.
The way Trigg sees it, Kickstarter isn’t just assisting iza trigg in raising production money for her handbags. Because of the viral nature of Kickstarter, her line gains exposure to a world of people connected to the fashion world.
"Spreading the word pays off,” states Kickstarter. “You provide the experience and the idea, your network helps fund and promote it.”
With Kickstarter being an all-or-nothing resource, if you raise less than your pledge then you take home nothing. But if you raise more, well, then it’s more money for your business.
“We wouldn't be putting all this time and effort into it if we didn’t think we could meet our goal,” says Trigg. “[But] the great thing about Kickstarter is that you can put yourself out there without taking much financial risk. If it doesn't work, you don't lose much capital.”