A rocket-charged Kickstarter campaign to raise funds for a film based on the cult series Veronica Mars is trumpeting the power of crowdfunding in the digital age.
With a 30-day funding goal set at $2 million, creator Rob Thomas rallied enough fan support to speed past the amount in just nine hours. The funds climbed beyond $3 million on the second day of the campaign.
The Kickstarter campaign was launched after Warner Bros. asked Thomas to prove there was enough interest in a Veronica Mars movie. Rather than polling consumers, Thomas lured fans with a campaign video and rewards for donating to the movie. The ultimate donation level – $10,000 – rewarded one lucky donor the promise of an on-camera speaking role in the film.
By the evening of Mar. 13th, Thomas tweeted, “Hallelujah! It’s a green light my friends. I love you all, but particularly the donors among you.”
Transforming role of the investor
Like the majority of crowdfunding platforms, Kickstarter hosts reward-based campaigns. When donors pledge at a certain level, they are guaranteed a pre-determined prize. In the Veronica Mars campaign, the first reward level of $10 gives donors a PDF of the shooting script and a behind-the-scenes scoop on the film.
In contrast to traditional investing, donors are not offered (and do not typically ask for) a “return on investment”. This is true regardless of the revenue the project, funded with donors’ capital, stands to generate.
Unlike a charity, there is also no tax benefit for funding a project.
Crowdfunding donors offer up smaller amounts of capital than traditional investors. The donation stems from pure interest or belief in a project, with the benefit of some merchandise or discounted products in the end. It’s a similar structure to publicly-funded radio or television fundraisers.
The producer is able to convince a larger number of people to donate smaller amounts of money without offering them a stake in the project.
Social media and viral marketing
Two of the biggest campaigns in the last year were heavily aided by social media and the viral nature of information on the internet.
A concerned individual started an IndieGogo campaign to send 68-year-old bullied bus monitor Karen Klein on a vacation. The goal was to raise $5,000.
A shocking viral video of the bullying shot donations to $700,000 – overfunding Karen’s vacation by 14,000 per cent and allowing her to retire.
Folk musician Amanda Palmer was able to fund her latest record and tour through Kickstarter, asking for $100 thousand and instead raising $1.2 million from a devout internet fan following.
Her May 2012 campaign showcased the potential of crowdfunding for artists and startups even though creative and digital property can sometimes be undervalued.
Crowdfunding in Canada
Canadian crowdfunding platforms are failing to gain traction. While Obama passed the “Crowdfund Act” as part of JOBS in April of 2012, Canadians are still wary of legalities with their own platforms. The enthusiastic buzz for U.S. startups like Kickstarter and IndieGogo has only translated to 17 Canadian sites, which blogger Michael Geist described as “sparsely-populated”.
Still, as trends lean toward the elimination of stake-holding middle-men, crowdfunding through popular U.S. or international platforms is an option for getting even the smallest of Canadian creative projects on its feet.
Bullied bus monitor Karen Klein receives $700K cheque after Toronto fund-raising campaign