Choosing Your Crowdfunding Platform: The Musician’s Crowdfunding Manifesto – Part Three

Welcome Back

Last time, I talked about how to set your crowdfunding target using the ‘minimum you need’ philosophy. Now that you have that taken care of, you need to decide which of the hundreds of crowdfunding sites is best going to suit your needs and wants. (Dreams even???) I’ll walk you through fixed and flexible funding, the ideal time limit for your crowdfunding campaign and take a look at some of the major forces in the crowdfunding world. This is where things start to get interesting.

Which Crowdfunding Platform is right for you?

Well, because every project is different, that will depend on a few factors. As things stand now, there are literally hundreds of different companies vying to have your project on their site. After all, the more money you raise, the more money these sites make. That is, after all, how they are able to provide this kind of service. The average cut that most sites will take is around 5%. This doesn’t take into account fees taken by PayPal or Amazon or whatever system of payment is used. Also, it is important to note that if you have a significant amount of funds coming in from other countries, you MUST take into account exchange rates and potentially even exchange fees.

Is your Campaign Rigid or Floppy?

Every crowdfunding site will have one of two kinds of campaigns you could run. They are ‘fixed‘ campaigns and ‘flexible‘ campaigns. Both have their advantages and disadvantages and most sites offer only one or the other. Some sites, however, offer both.

Fixed Funding – All or Nothing

Fixed funding is the more common of the two methods for musicians. In a nutshell, you set your financial goal and timeline and promote the s**t out of your campaign. If all is successful (you reach your target amount), then when the campaign ends, the funds are transferred into your bank account, minus the fees for using your platform’s services. It is at this time that your funders’ credit cards are charged. However, if you do not reach your target in the set amount of time, then no money is transferred into your account, and no money is charged to your backers’ cards. All or nothing.

Advantages of Fixed Funding
  • “Risk free” for your backers. If the project isn’t successful, then your supporters will not have to worry about their money going to an underfunded and possibly unsuccessful venture.
  • Forces you, the artist, to step things up. If you know you won’t see a cent of your hard-earned pledges by the deadline, you will be more motivated to promote your campaign in any way you know how.
  • Creates a sense of urgency, which in turn, may motivate people to back your project.
Disadvantages of Fixed Funding
  • You may not see any of the funds. If you are even $1 under your goal at the campaign deadline, then you’ll see absolutely nothing.

Flexible Funding – All Or Something

Flexible funding, while not as popular for musicians, is still a mighty fine way of garnering more funding for your project. Using this method, you will receive all of the funds pledged to your project whether or not your funding goal is actually reached. This can be a double-edged sword, however.

Advantages of Flexible Funding
  • You keep all of your pledges no matter what. If you raise just $1, you get to keep it, although in reality, if you did only raise $1, the fees from your crowdfunding site and your payment system would probably leave you with very little, if anything.
  • Backers know that if you don’t reach your target, they are still a part of your project.
Disadvantages of Flexible Funding
  • You may not be able to deliver on your rewards if you don’t raise enough money. For example, if you’ve tried to raise money for album manufacturing and offered physical copies as a reward and you don’t have enough money to pay for that, then you cannot offer that product to your backers.
  • Most sites will charge an extra percentage if your flexible funding goal is not reached. For example, IndieGoGo charges 4% of funds raised for campaigns that meet their mark, but 9% for campaigns that do not reach their target amount.

I would not recommend a flexible funding campaign for musicians under most circumstances. Flexible funding would be perfect for projects that will happen regardless of extra funds, but could use some ‘cushioning’ from fans and supporters. For example, if you were friends with a producer and an engineer who were willing to work for less than their ordinary rates but you felt compelled to offer them a decent wage for their work, then a flexible funding campaign would be perfect. Having that producer and engineer would happen regardless of whether or not you received any funds at all.

Many flexible funding campaigns I’ve seen are for things like medical bills and non-profit causes. They certainly have a ‘target’ but it serves as more of a symbol of the kind of money they hope to raise. Remember in the last installment I mentioned that the target amount may depend on whether you can afford to go ahead with or without your backer’s support? A flexible funding campaign is ideal if you can go ahead, even without additional support from your fans.

The Golden Rule of Your Crowdfunding Timeline

Keep it short and sweet – 30 days or under. Most sites offer a number of campaign schedules, but the most common are 30, 60 and 90 day periods. However, just because you can have a longer campaign does not mean you should or that you will gain more backers. Sometimes the exact opposite can happen. Having a shorter 30-day period in which to raise money creates a certain sense of urgency for your potential donors, which is vitally important. If they were to come to a page that has 3 months remaining, the message that they may take away is that it’s not that important to contribute right away. They may leave your page with all intentions of coming back later, but may never get around to it. Most of the crowdfunding platforms recommend the 30-day option in their support sections. It’s good advice. Take it!

Having a shorter time period means that you need to go the extra mile beforehand and be prepared before you hit that launch button, but if you’re following all of the advice I’m shoveling out here, then you should have all your ‘ducks in a row’ well in advance of your launch date.

The Big Players

The two most well-known and biggest crowdfunding sites on the Internet right now are Kickstarter and IndieGoGo, but there are so many sites that do the same thing, and new ones are popping up all the time. There are some that only deal in creative projects, some in non-profit, a lot in English, and plenty in other languages. The most comprehensive list that I can find is this one here. There are more than 130 platforms to choose from!

Below is a list that details a few of the biggest and most well-known crowdfunding sites. It would be impractical to list every single site than allowed music projects so I have picked just a few to look at. Also be aware that for most of these sites, you will be charged an additional percentage of funds for credit card transactions and other related fees, i.e. PayPal fees, exchange fees, bank transfers etc.

IndieGoGo

  • 4% fee for projects that reach goal
  • 9% fee for projects that do not reach target
  • Both fixed and flexible campaigns available
  • Open to any sort of project (as long as you have a valid bank account)
  • All projects in U.S. Dollars – if using another currency, you will be charged an exchange fee.
  • Up to a 90-day campaign

Kickstarter

  • 5% fee of all funds raised
  • Name brand crowdfunding – Current Industry leader
  • Fixed funding campaigns only
  • “Creative” projects only
  • Must have U.S. Bank account and mailing address (Payments are done through amazon.com)
  • Projects must be approved by Kickstarter staff
  • Up to 60-day campaign

PledgeMusic

  • 15% flat fee (includes all credit card and transaction fees that can be ‘hidden’ in other crowdfunding sites)
  • Striclty music related projects
  • Fixed funding only
  • Up to 90-day campaign
  • Great personalized support from PledgeMusic staff
  • Boasts a 78% success rate
  • Big name artists have used PledgeMusic from Ben Folds Five to Funeral For A Friend
  • Charity option available – artists can pledge an amount of their funds to a charity of their choice

Pozible

  • 5% “Standard” fee
  • Discounted 4% fee for having an “Invitation” or being a “Network Collaborator”
  • Fixed funding only
  • Limited to Creative Projects
  • Australian based, but 22 currencies available
  • Up to a 90-day campaign

RocketHub

  • 4% fee for projects reaching target
  • 8% if campaign does not reach target
  • Flexible funding only
  • Projects in U.S. Dollars
  • Up to a 90-day campaign
  • All kinds of projects accepted (as long as they’re legal…)

Sponsume

  • 4% fee if target is reached
  • 9% fee if project does not reach target
  • Flexible funding only
  • Creative and entrepreneurial projects accepted
  • British-based company – deals in British Pounds and Euros
  • Up to a 90-day campaign

These are just six of the ‘name’ platforms that I have come across that work well for musicians. There are so many more. Check out as many as you can to find the right one for you. Do your own research. Contact previous users of the platform you’re thinking of using and see how they found the experience. Try to find successful people and unsuccessful. They will probably have different views. It’s always good to hear the other side right? Personally, I always look for the bad reviews when I’m thinking of buying something, just to see what I may be getting myself into, although, maybe that’s just me.

One and Done

Be aware that if you attempt to fund your project on a fixed funding scheme and you do not reach your target, some sites will not let you try again for that particular project. If this happens to you, and you decide to try again on a different platform, be sure to change your video and information. Nothing looks worse than watching a video on IndieGoGo and having somebody talk about their Kickstarter campaign. It looks super unprofessional and more than just a little bit lazy.

Simultaneous Funding

Having the same campaign running on more than one crowdfunding platform may sound like a good idea. The more places your project can be seen, the better, right?

NO!!!

If anything, this will dilute your funding and you may end up with less than you may have if you’d stuck with just one. This would be especially true if you don’t meet your goal on a fixed funding campaign. You want to have one site that you can concentrate all of your efforts on. Will Fisher went even further and didn’t post his video anywhere apart from his Kickstarter page in an effort to funnel all of the traffic to the place where the pledges were made.

At the End of the Day…

Nobody knows your project better than you and you will have the final say when it comes to which crowdfunding platform will serve you the best. Once again, do your research! (I’m sensing a pattern here) If there is something about a particular platform that would suit you very well, then go for it! If there is something that turns you away from a particular site, then steer clear of it. Use your best judgment in deciding what is best for your project.

Join the Conversation

Once more, thanks for taking the time to read. If you like it, make sure you share it, or tweet it or pin it! Do you know someone who’s thinking about crowdfunding? Send them this way! (You know you want to…)

Leave a comment! Do you think I got it pretty much right or would you do things differently? I want to hear from you!

Next time, it’s all about the crowdfunding video: how to make it and how to get it to work for you. I think it will be the best one yet. Stay tuned.


									

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