Article By: Chris Ronald
The idea of crowdfunding is not new. In fact, it is common for anyone launching a new venture to “begin at home” when securing initial support and uptake of services. I liken it to mowing lawns when I was a lad; I’d start off by doing it for my dad for a bit of loose change and, before long, I’d be cutting grass for the neighbours.
Since those halcyon days of mowing lawns as a teenager, the Internet has arrived and with it many online services offering artists a fundraising platform for creative projects. Three such web sites that seem to be on the tips of tongues these days are IndieGoGo, RocketHub, and Kickstarter. They all work under the same premise which is to give artists a means to attract donations in exchange for exclusive perks. This all sounds pretty straight forward, but there are a number of factors to consider when setting up your stall.
- Cost: It’s free to get projects up and running but fees are charged at the end of the campaign. There’s little to choose between the above-mentioned sites as they all charge between 8-10% on the amount raised. However, if you don’t reach your target, the fee could be as much as 12%. I notice IndieGoGo also charges a $25 wire fee for non-US campaigns.
- All-or-nothing: Kickstarter adopts the “all-or-nothing” funding approach, which means if you don’t hit your target all donations are returned with no fees incurred. IndieGoGo gives you the option of all-or-nothing or keeping whatever you raise (but with increased fees if you don’t hit your target). RocketHub has no all-or-nothing option but offers “LaunchPad Opportunities” if you’re successful.
- Time limit: each site imposes a campaign time limit. IndieGoGo allows a maximum of 120 days, RocketHub 90 days, and Kickstarter 60 days.
- Setting the target: It’s important to consider the above information and a few other factors when deciding on a funding goal. First, bear in mind you’ll get dinged by higher fees or raise nothing at all (depending on which site you choose) if you don’t hit target, so be realistic and err on the side of caution. Second, consider the potential level of support you might get from fans to avoid setting a target that’s too ambitious. Last, devise some rewards that might attract support beyond your established following; chances are you’ll need all the help you can get.
- Devising rewards: RocketHub recommends you offer rewards at low ($5-$10), medium ($150-$500), and high ($1000+) levels. Coming up with tangible, unique rewards is a good brainstorming activity and led to my new “Songift” service.
- Building credibility: It’s recommended to have some donations already in the bag before telling the world about your campaign. Potential donors are more likely to want to learn more about your project if they can see that others have already contributed.
- Payment methods: Donors have to pay using a credit card, apart from IndieGoGo which also takes PayPal. Donors don’t get charged for using credit cards. Instead, processing fees are deducted from the final pot of money raised and are included in the percentages outlined above.
- Consider spin-offs: Benefits may arise because of but outside of your campaign. As a result of my project, supporters have been contacting me to offer help in other ways such as putting me in touch with producers, studios, videographers, etc. Even if the funding goal is not achieved, other good things may come out of trying.
I’ve been singing and songwriting for 25 years, and I’d much rather be channeling my energy creatively than working on “the part that ain’t art.” However, as I’m considering going all-in on my music career in the very near future, I appreciate that the creative and financial elements are going to have to walk hand-in-hand. Also, as an independent artist operating in the difficult and highly-competitive market that is the music industry, I recognize a need to be creative in all areas of the business. I think crowd funding is a great way to ask for help in mowing the lawn, but it is just one more tool in the shed.
To join in crowdfunding Chris Ronald’s next album: CLICK HERE.
Click Here to visit Chris Ronald’s Songwriters Profile.