Tools & Techniques
Kickstarting Your Business or Getting a Project Off the Ground
You have an idea for a business (or a side activity to generate an income stream), or simply want to undertake a specific project. Now, you need capital for equipment, materials, facilities, marketing, and distribution. Traditional sources for funds may not be available (savings, financial institutions, friends, your parents), but a new alternative has emerged called crowd funding, in which contributions are sought from the public over the Internet—sort of like “going public” without sharing ownership. The best known vehicle for this course of funding is Kickstarter (kickstarter.com). It has recently become the darling of independent filmmakers, as hundreds of projects have been financed in just the last 18 months. Most notable, the producers of Veronica Mars were able to raise $5.7 million from 91,585 backers in just 12 hours towards a movie version of the cult television series, and actor Zach Braff collected $3.1 million from 46,520 donors for a sequel to his movie Garden State. However, most Kickstarter projects are much more modest, and it even has become a source of funding for woodworking endeavors.
WHAT IS KICKSTARTER
Kickstarter is an Internet website which assists project creators in raising funds to develop their proposals. Projects are explained on the website in text, pictures, and videos, and a funding goal and deadline are set. People who like the project can pledge support by submitting an amount and credit card information to Kickstarter, who holds the funds in an escrow account.
Helvey Design Studio’s production of its initial line of furniture was supported, in part, by funding provided by the website Kickstarter.com. The Coffee Table (18" h, 42" w, 32" d) above is available in Oak or Walnut with a black or white metal finish. The Dining Table (29" h, 66" w, 36" d) below is available in the same finishes.
This is an “all or nothing” affair. Projects must reach their funding goal in the allocated time period to receive the money, otherwise the credit cards will not be charged. The strategy for the proposer is to chose a funding level that comes close to meeting their needs, yet has a good potential for being met by contributors. Set too high, they may get nothing. This all or nothing approach encourages submitters to rally support, often using social media outlets, for their projects, and insures backers that their contributions will not be wasted on underfunded causes. Since its launch in 2009, more than 4.2 million people have pledged over $649 million, funding more than 42,000 creative endeavors. The website claims that 44% of requests have reached their funding goals. Since no ownership shares are involved in the investments, donors often receive premiums for their contributions (sort of like PBS pledge night tote bags). Benefits can range from being informed on the projects progress to samples, one of the final products, or—in the case of movies—a part in the production. In some cases, the Kickstarter appeal simply provides a way of securing pre-orders for the proposed product. On the other hand, some people contribute simply to foster a dream, want-
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Woodworker West
July-August, 2013