Who says it's not cool to follow the crowd? While US creative crowdfunding giant Kickstarter may be the name globally synonymous with crowdfunding, there's no shortage of options for Kiwis looking to jump on the bandwagon.
Want to donate to a good cause? Turn to Give A Little. Perhaps you want to find and flex your political muscle? Use OneBigVoice. Maybe you want to join one of Conscious Consumers’ ‘carrot mobs’ where crowds of buyers influence the ethical and environmental choices cafes make. Arts junkie?
Consider Boosted — it’s on a mission to raise a new generation of net savvy patrons. Then there’s PledgeMe, a local take on Kickstarter. New Zealand seems to have the perfect climate to achieve at least a portion of the success of sites like Kickstarter. Kiwis are arty and giving sorts — and as Trade Me shows, we like to put cash into getting what we want online.
“We totally expect it to take off,” says Anna Guenther, co-founder of PledgeMe and author of a local Master’s thesis on crowdfunding. “We’ve been watching what’s happening in the States, Europe and Australia and it’s growing exponentially.”
The Arts Foundation is equally bullish. It aims to raise $2 million in tax-deductible giving per year for our arts scene when it launches Boosted in September. “I think crowdfunding will be integral to the future of the arts,” says Simon Bowden, the foundation's executive director who led the establishment of Boosted.
“We have a vibrant, keen arts sector which is prepared to take risks and excited to talk about itself in a way that will create momentum. We have the digital world that allows us to communicate with audiences in a new way.”
Another Kiwi platform, Social Backing, had more than 20,000 Facebook likes before it went live earlier this year and anticipates $150 million in funding revenue and a profit of $5 million within three years.
Globally, the numbers point to a digital wave that’s swept the centuries-old concept of philanthropic microfunding into today’s world of entrepreneurs hungry for growth: 452 platforms worldwide, 100 million-plus campaigns and US$1.5 billion raised, according to US research firm Massolution.
It’s fitting that the crowdfunding movement, with roots in supporting creative types, should credit US record label ArtistShare as the first to take the fan funding model to the web at the turn of the millenium.
If you’re getting a picture of crowdfunding as the pathway to venture gold, however, beware the potential landmines. Guenther admits it’s not a recipe for easy cash, especially if you’re chasing big dollars.
“There’s a lot of work by people selling their product. The more you ask for, the more commitment you have to have in talking with people and posting updates and pitching it right. We say if you’re asking for funding over $10,000, you should be spending at least an hour a day working on your campaign, responding to people and sending out updates. It’s not just sending out a mass Facebook update, sometimes it’s talking to people who might be interested.”
For advocates like Guenther, small country equals big heart.
“We keep getting asked why we would even try in New Zealand because it’s such a small country, but that’s sort of the beauty of it as well. There’s a huge connection between New Zealanders and creativity; it’s a very charitable and creative nation. We hope crowdfunding could be like the next Trade Me in changing how people support each other online.”
For others, small country means just that. When Kiwi co-working space the Biz Dojo looked to propel some of its residents’ marketable ideas, it bet on Kickstarter.“Crowdfunding, like auctions, work best where there is very high participation from a large, developed audience,” says dojo partner Phil Williams. “When you can raise $3 million on Kickstarter, why would you list anywhere else?”
Owner orders dog to attack neighbour (graphic content)
What is the biggest challenge your small business is facing in 2014?Related story: (See story)