Crowdfunding

423 views
371 views

Published on

What is crowdfunding? Learn more about this new funding mechanism and why it is so popular. Are there hidden pitfalls? Will it work for everyone? Then hear a firsthand report on the “CinemaSalem Miracle,” a crowd funding campaign that raised more than $68,000 to enable the local theatre to convert to a new digital cinema system. What were the positives, the negatives, and the lessons learned?

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
423
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
8
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Crowdfunding

  1. 1. Last year at this time, CinemaSalem faced a life and death crisis. We needed to raise around $60,000 in a few months to convert our 35mm movie theater to digital projection.
  2. 2. ! Hollywood is phasing out movie distribution on film in favor of digital distribution, threatening hundreds of small indie theaters. ! Because conversion to digital is very expensive, in the next year, 3,000-4,000 movie theaters will close.
  3. 3. We had a plan. Leveraging our strong support among local merchants, we hoped to set up individual meetings with 120 businesspeople, asking them to contribute $500 each. ! All that would be required was: -about 240 hours of our time (six weeks at 40 hours per week) -the ability to sell, utilizing a somewhat weak value proposition -figuring out how to collect the money ! and a 100% success rate.
  4. 4. Then someone suggested Kickstarter. Kickstarter = Crowdfunding -instead of one person giving $1 million, one million people give $1 -allows many people to participate in something important -encourages affiliation with your project/venture -- a sense of ownership -encourages funders to come to you -the fundraising mechanism and technology is pre-built and fully customizable -the platform is trustworthy - we had to apply and be approved -the process of actually making a money contribution is simple and familiar -encourages donations by offering rewards -wildly popular -crowdfunding as a concept is relatively new
  5. 5. Two types of successful Kickstarter projects, and their two very different motivations. 1) The opportunity to purchase a product, usually an innovative one, while making its creation and manufacture possible: motivation is rational -- affiliation with inventors combined with acquisitiveness. 2) The opportunity to make a difference in the world, creating or preserving something important to you: motivation is emotional -- affiliation with a cause or a community asset combined with the opportunity to enjoy that asset.
  6. 6. Tapping an Emotional Response: CinemaSalem Kickstarter Comments Someone who lives and works in Harvard Square wrote, “Everyone who works here feels like the closing of the Harvard Square AMC theater this fall was a huge loss. We have great restaurants and shops still, and each time we’ve lost a bookstore, it’s felt devastating, but there was always a bookstore left. Losing that movie theater feels like we’ve lost the heart of Harvard Square.” From Jennie Cudmore’s Facebook page, referencing her son: “OMG Tommie makes me so proud, he watched the Save CinemaSalem video and said, ‘I'll give them my $10.00!’ and he also said, ‘I don't mind not getting Christmas presents this year and we can give money to CinemaSalem.’”
  7. 7. The Good News: ! Thanks to more than 1000 Kickstarter backers, over a 40-day period, CinemaSalem’s Kickstarter campaign raised $68,895 and Salem’s downtown movie theater successfully converted to digital projection in March, 2013. ! We reached our goal of $60,000 in 12 days.
  8. 8. Takeaways: ! -gratitude and humility at being part of something amazing -several things we learned through the process ! Things we did right Things we did right accidentally Things we did wrong Things no one tells you about crowdfunding
  9. 9. The CinemaSalem Miracle: Things We Did Right - Intentionally -research Kickstarter (or your platform) to see what works and what doesn't -be honest and dependable -use humor -state the challenge simply and dramatically -make a video that shows your face -connect with your conventional networks before the launch - like Salem Chamber! -use traditional media to publicize the campaign -make sure all your staff is intimately familiar with the campaign -be available -provide updates -deliver your rewards on time (or if something comes up, explain why you can't) -keep the rewards affordable (in value and in time) -promise mostly flat rewards (which can be mailed in an envelope) -pay attention to every backer
  10. 10. The CinemaSalem Miracle: Things We Did Right - Unintentionally -share the Kickstarter draft site with some people before launch (including fundraisers) -become viral on Facebook -- initiated by the Salem News article -have already built equity in the community by how you conduct business -strike a nerve with people all over the world -keep a permanent relationship with every backer -a successful Kickstarter campaign will improve your overall business (our business is up about 11% this year)
  11. 11. The CinemaSalem Miracle: Things We Did Wrong (largely inconsequential) ! -underestimated some of the costs of digital conversion -we may have set our target too low (target reached in 12 days) -we could have run the campaign for 30 days instead of 40 -underestimated the amount of time fulfilling rewards
  12. 12. The CinemaSalem Miracle: Things No One Tells You about Crowdfunding -in Kickstarter, if you contribute to your own campaign, you lose all the money committed -be prepared for a very public referendum on you and your business -the overhead costs are about 8-10% -give yourself at least 2-3 weeks to build the site, get approved, and arrange the finances -consider the tax implications -about 15% of your backers won't end up paying -running a Kickstarter campaign is a full-time job for awhile ! -your business will permanently deepen its relationship with your customers and community -you will want to stay connected with your backers -the “ownership” of your business will be shared forever - which is a good thing -you will feel incredible gratitude !
  13. 13. Thank you.

×