08 Feb Film Fund-amentals: The Crowdfunding Year
Osama bin Laden is not yet dead.
OK, he’s dead, but now he’s one of the undead. He and his undead terrorist zombie hoard are sweeping across Afghanistan in the movie Osombie, an odd cross between The Hurt Locker and Night of the Living Dead. The movie sounds half-nutty, and it’s a wonder that Kathryn Bigelow hadn’t thought of it first.
Osombie is now in post-production and you, your friends, relatives and neighbors can donate to Kickstarter to help them complete this likely challenger to Citizen Kane. Since the filmmakers only need to raise $15,000 for the post-production and they are already two-thirds of the way near this goal with nearly two months left in the drive, they will most likely make it. Another success story in 2012, the unofficial year for crowdfunding.
I’ve been neither hot nor cold on the crowdfunding phenomenon. In many ways, the approach is almost too new and bold to truly judge. Instead, I’ve been attempting to watch the developments as a vast range of projects rose and fell through the ever-expanding universe of crowdfunding sites. Early in 2011, I suggested to several filmmakers that the crowdfunding method was probably most ideal for movies that only needed around $6,000 to $10,000 dollars. Then Jennifer Fox broke the record when she scored over $150,000 for her production of My Reincarnation.
I am no longer comfortable with trying to guess the possibilities with crowdfunding. I don’t believe that the sky is the limit (an attitude I have in regards to lots of things). Most current estimates place the success rate through crowdfunding at slightly less than 50 percent (rough overall estimate of a 43 to 46 percent rate). Compared to other means of raising funds, this is about as close to a sure thing as you can get. Even if final estimates should place the success rate closer to 40 percent, this is still phenomenal. Most other fundraising approaches are lucky to have a success rate near 10 percent. Most are way less.
Of course, this has convinced some people that crowdfunding is the gateway to easy money. I would strongly recommend reading Jennifer Fox’s own observations and tips on crowdfunding (starting with her first post and continuing on to her later comments and all her links in between). Or if you prefer, just Google “tips for crowdfunding” and you will find out that everybody has advice. Heck, success not only has a thousand fathers, but every papa in the valley is ready to tell you what to do.
One of the first things you will learn is that crowdfunding is not an easy way to go. Contrary to what folks may wish, you really can’t just throw together a few sentences about the project, tell people that it’s really going to be fantastic, then kick back and watch the moo-la roll in. Every crowdfunding site is packed with hopeful candidates, and you have to find a way to push your project above the loud roar of the marketplace. Before you even decide to pursue this path, spend some time (like several weeks) going online and reading the many pages of advice and tips on using crowdfunding. It is the kind of zone where there are many ways to go right and you will want to use every one of those ways.
There is also one odd feature about crowdfunding that you may want to keep in mind. The core concept is that people are making donations to your project. In return for their donations, you are promising them some form of gift with the completion of the movie. Usually a free DVD copy of the film is offered. OK, let’s say you have received 20,000 donations. That turns into 20,000 free DVDs. It may even be more free DVDs than you can ever hope to sell. Maybe you should do a serious (and very detailed) cost analysis before you promise anybody anything. After all, why get a bunch of strangers to fund your movie if you end up going bankrupt afterwards?
Everyone is also going to want to keep an eye on several pieces of legislation currently in Congress concerning crowdfunding. In theory, these bills are to help expand crowdfunding for an increasing number of small businesses (most notably the Entrepreneur Access to Capital Act). This part sounds OK, especially since crowdfunding is rapidly entering a zone where the dividing line between donations and investors is getting thin and all future directions are moving into an area that will bring the process increasingly under the focus of the SEC.
But things get funny in Congress, and bills sometimes have a strange way of going all topsy-turvy weird as they roll around the aisles. You can send a bill to the House proclaiming sunny days as good for people and by the time it gets to the Senate it has become a ban on sun screen. Crowdsourcing.org is a good site to regularly check for updates on these bills and many other issues.
Likewise, the increased integration of crowdfunding with social networking sites has become critical. This is part of the Entrepreneur Act. Facebook, Twitter and other social networking sites have become important elements to the creation of successful crowdfunding campaigns. Again, Goggle is packed with sites offering advice. Some of the advice is even good.
Just be sure to have lots of snacks by your side. You will be online for quite a while.