Tag Archives: crowdfunding

how to succeed at crowdfunding

How to succeed at crowdfunding: Kickstarter vs. Indiegogo

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The most common question we receive at The Artist’s Partner is:

“What’s the difference between Kickstarter and Indiegogo?”

The similarities outweigh the differences. They are both crowdfunding platforms, meaning they:

  • Facilitate raising money for creative projects through a webpage customized to your project where you can pre-sell your project for a set amount of time and a target dollar amount through a pitch video;
  • Tell the project story through words and images
  • Make the project and other rewards available
  • Update backers through a blog.

However, there are some key differences that lead us to recommending one over the other, depending on the particular client’s circumstances.

1. All things equal, we typically use Kickstarter.

Kickstarter is the largest platform with the best brand recognition. This is important, because for your campaign to succeed, people will need to enter their credit card information on the internet.

kickstarter vs indiegogo

2. For nonprofits, we typically use Indiegogo.

Through FirstGiving, Indiegogo makes tax-deductible pledges easy. For more information on all of the ins and outs of this program, visit the Indiegogo page dedicated to doing business with them as a non-profit.

3. For flexible funding, we go with Indiegogo.

Kickstarter is all-or-nothing: surpass your $ target – or you get zero. This may seem draconian, but it forces a higher level of organization, preparation, design, and drive that gives Kickstarter the brand edge.

However, sometimes circumstances are not ideal; we can’t launch the campaign at a good time of year, or we don’t have the full amount of time to prepare, or no-one has committed to the project as a significant financial benefactor. In these cases, we typically turn to Indiegogo because it has a flexible funding option. This means, for a higher percentage fee to Indiegogo, you can keep whatever money you raise even if it is below your monetary target.

4. For nontraditional projects, we typically use Indiegogo.

Kickstarter is a stickler for what kinds of projects they allow – and what kinds of projects they don’t allow.

 

Indiegogo is much more open-ended. They include sports, small business, animals, health, environment, and other project categories that Kickstarter simply does not allow. Generally speaking, the spirit of Indiegogo is much more open-ended. For a project that does not fit Kickstarter’s strict categories, Indiegogo is a much more comfortable choice.

If you would like our recommendation on which platform to choose for your project, please fill out our Artist Questionnaire. We typically respond within two weeks. We look forward to hearing about your project!

how to succeed at crowdfunding

How to succeed at crowdfunding: Calculating Your $Target

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Setting the right dollar target for a crowdfunding campaign is a key reason our clients’ success rate is 97% (compared to the industry average of 38%). So, how do we do it? We follow these four steps.

1. We collect the pertinent information.

During our first consultation with a new client, we ascertain the size of their network and any existing benefactor financial commitments.

crowdfunding target analysis - data entry

From this sample client (based on an actual Artist Questionnaire response we received in April 2015), the info we received was:

  • The size of their email list – 300
  • The number of social media friends and followers – 400
  • The amount of money already committed by financial benefactors of the project – $5,000
  • The target amount of money they are looking to raise through crowdfunding – $30,000

2. We calculate the funds they stand to raise based upon the size of their network today.

We crunch some numbers based on the information provided, as well as consider some industry stats. For example, the typical response to email communiques is 25% – roughly a quarter of those who receive an email about the crowdfunding campaign will participate. By contrast, the response to social media posts is only 1%! The median campaign pledge amount is $25; the average is $70. We use all these figures to calculate the range of funds the client could theoretically raise based on the size of their current network.

crowdfunding target analysis - question a

For this sample client, the figures fell out at approximately $7,000 – $10,000 that the artist could raise from their existing network.

Of course, every campaign is different, and we’d need to do a lot more digging into their network to find out how we may want to adjust the percentages. This isn’t a guarantee of how much money this artist will ultimately raise, but it is a perfect starting point for discussion.

3. We calculate how the client’s network needs to grow in order to reach the desired dollar target.

This sample client’s scenario is common. Based on her current network, it would be prudent to aim for a $7,000 crowdfunding target. But, she wants to raise $30,000 to produce her project. That’s a gap of $23,000.

Next, we start from the desired target and crunch the numbers backwards. We find out how the existing network would  need to grow in order for the client to hit that $30k goal.

crowdfunding target analysis - question b

In this case, for this sample client to reach a $30,000 goal, she would need to:

  • Increase her email list from 300 to 2,640
  • Increase her social media friends from 400 to 6,000
  • Increase benefactor commitments from $5k to $12k

Again, every campaign is different, and this network growth would not guarantee success. But this is a great place to continue the discussion.

4. We help clients make the key decisions regarding next steps.

This sample client has some tough decisions to make. Does she want to…

  • … reduce the project scope from $30,000 to $7,000, or
  • … increase her email list by 2,340, their social media following by 5,600, and her benefactor commitments by $7,000, or
  • … find an answer somewhere in between?

Lots of factors influence this decision, from timing, to personality type, to who is involved on the team, and much more. We facilitate that conversation so that ultimately, our clients can set a campaign monetary target that they can achieve.

If you would like this crowdfunding $ target analysis performed for your project, please fill out our Artist Questionnaire. We typically respond within two weeks. We look forward to hearing about your project!