Do you want to publish a book, film a documentary, or record an album? A new way of raising money has hit the Internet. Earlier this year I wrote an article about a new law that will allow small business owners to raise capital without the large amount of red tape historically involved with such an undertaking. Of course, raising capital typically means giving up a portion of the ownership of your enterprise to investors. There is a new way to raise money for a specific project that still leaves you the 100 percent owner of the final product. The website Kickstarter.com allows individuals to raise an unlimited amount of money for their project.
In the example below an author successfully raised more than $25,000 to self publish a book. Click on the graphic to see the entire campaign.
I found Kickstarter to be a very user friendly website with a great FAQ section that cleared up some of the confusion I had about how this all worked.
Eligibility To List A Project For Funding
To be eligible to start a Kickstarter project, you need to satisfy the requirements of Amazon Payments:
—You are 18 years of age or older.
—You are a permanent US resident with a Social Security Number (or EIN).
—You have a US address, US bank account, and US state-issued ID (driver’s license).
—You have a major US credit or debit card.
What Exactly Is A Project?
OK, this part left me a little confused at first, but I think I finally got it. The site can be used for specific projects that have a finite lifespan. For example, you can use the site to raise money to publish a book but not to start a publishing company. You can raise money to film a documentary but not to open a movie theater (get it?).
Backers can not receive a financial interest in your work, so incentives called 'rewards' are offered. Examples of rewards to backers are signed copies of a book, or even their name being listed in the acknowledgement section. A film creator may offer a copy of the final DVD and list a backer's name in the credits of the movie. People will be motivated by the rewards but mostly by the opportunity to be part of a project that they see merit in.
Do I Have To Be A Non-Profit?
Some online fundraising sites require that you form a non-profit organization to qualify to raise funds. This is not the case with Kickstarter, which makes it a very attractive option for anyone to consider.
How Much Will It Cost?
If your project does not successfully fund, then you pay nothing. If your project is funded, Kickstarter takes a 5% cut of the final proceeds.
Here is a link to quite a few other online fundraising options for you to consider. Keep in mind that each site has its own rules, requirements, fees, and limitations. I really like this idea and am considering using it for a project of my own in the near future. I was skeptical at first, but when I learned that 43% of the projects listed on Kickstarter in 2011 were successfully funded I was very impressed.
I am sure that like a lot of things on the Internet, people who already have a following will do better than those that don't. With that in mind, starting a blog or website will give you much more online visibility and a place to promote your project outside of the Kickstarter site.
If you have ever used a site like Kickstarter to raise funds, I would love to read your story. Please use the comments section below to share your own experience.
Helping you make the most of God’s money!