How to Use Crowdfunding to Finance Your Indie FilmDiscover the 4 keys to a successful crowdfunding campaign.
“Win the crowd and you win your freedom.”
This post is a part of our in-depth series about how to finance your independent film.
It is best read after (1) a beginner’s guide to independent film financing, (2) 3 first steps to finance your indie film, (3) how to get donations and grants for your indie film, and (4) how to find investors for your indie film.
New From Old
And so we come to the child of The Bronze Age: crowdfunding. This arena shares much in common with the noncommercial arena of donations and grants and the commercial arena of investments.
You will be competing with other filmmakers for support. You must believe in the value of your product, and you must show people that your product is valuable to them.
In other words, you’re still making a pitch, and you’re still presenting the crowdfunding equivalent of a grant proposal or a business plan. It’s as much work as approaching a foundation or engaging an investor – in some ways even more, because crowdfunding is plugged directly into the filmmaker’s community.
Simply put, crowdfunding is the confluence of the established arenas of independent film financing. It’s new technology built on old methods, adapted to the economic climate of The Bronze Age.
To refresh our memories, let’s revisit John Trigonis’ summary of crowdfunding as an online arena “in which a person sets up a project page, uploads a pitch video, offers some rewards, and reaches out directly to the audience through email and the social networks, as well as… word of mouth.”
But where to set up this project page? Will any old website serve effectively as home base?
Generally, no. The first decision a crowdfunder must make is which platform to use.
A platform is a website that provides a user with the toolset she needs to conduct her crowdfunding campaign. There are over 400 platforms – including RocketHub, Ulule, and Seed&Spark – but the mainstream choices are Kickstarter and Indiegogo.
Kickstarter operates in an all-or-nothing paradigm.
If a project does not reach or exceed the funding goal it sets, it does not receive any money. This go-big-or-go-home approach motivates crowdfunders to actively run their campaigns, and it effectively manages risk. “If you need $5,000, it’s tough having $1,000 and a bunch of people expecting you to complete a $5,000 project,” Kickstarter’s FAQ summarizes.
If you’re intimidated by this policy, consider these heartening statistics, also in Kickstarter’s FAQ:
Of the projects that have reached 20% of their funding goal, 81% were successfully funded. Of the projects that have reached 60% of their funding goal, 98% were successfully funded. Projects either make their goal or find little support. There’s little in-between. To date, an incredible 44% of projects have reached their funding goals.
Projects can run from 1 to 60 days. Kickstarter recommends a deadline of 30 days or less.
If a project meets its funding goal by its deadline, Kickstarter collects a 5% fee. Additional payment processing fees of 3-5% also apply.
As of fall 2015, Kickstarter campaigns can be started in the US, UK, Canada, Australia, New Zealand, the Netherlands, Denmark, Ireland, Norway, Sweden, Germany, France, Spain, Italy, Austria, Belgium, Switzerland, and Luxembourg, and they can be funded by supporters around the world.
Indiegogo is a different beast. Granted, like Kickstarter, projects can run from 1 to 60 days. On average, campaigns that reach their funding goals set a 47 day deadline.
What sets Indiegogo apart from Kickstarter is its offering of two paradigms. Certainly, you can launch an all-or-nothing campaign – in Indiegogo speak, a “Fixed Funding” campaign – or, you can launch a “Flexible Funding” campaign, in which you keep the funds you raise even if you don’t reach your funding goal by your deadline.
Indiegogo collects a 4% fee from a successful Fixed Funding campaign. It collects a 4% fee from a Flexible Funding campaign that reaches its funding goal. If a Flexible Funding campaign does not reach its funding goal, Indiegogo collects a 9% fee. Additional payment processing fees of 3-5% also apply.
It’s worth noting that, according to an analysis of public data by The Verge in the fall of 2013, roughly 10% of Indiegogo projects reach their funding goals, compared to Kickstarter’s 44%.
As of fall 2015, Indiegogo campaigns can be started in more than 200 countries and regions, and they can be funded by supporters around the world.
Kickstarter or Indiegogo?
Assuming that Kickstarter is an option in your country, which mainstream platform should you choose? Their toolsets are similar. The fees they collect from successful all-or-nothing campaigns are comparable.
Trigonis weighs in:
From a strictly statistical standpoint, I recommend Kickstarter over Indiegogo if you’re looking to raise larger amounts of money for your film project… [However,] a lot more short films seem to find funding on Indiegogo over Kickstarter.
He notes that these trends will change with the times, but they’re nevertheless a helpful barometer.
Also note that Kickstarter can be used to fund creative projects only. In contrast, Indiegogo can be used to fund anything, from creative projects to worthy causes to dream vacations. Consequently, one might surmise that Kickstarter attracts a more targeted audience for filmmakers’ crowdfunding campaigns.
Regardless, a word about Indiegogo’s Flexible Funding paradigm. As a responsible filmmaker embarking on your fundraising journey, you no doubt have created your ideal budget and “worst case scenario” budget, as advised in our introduction to film financing. What happens if you run a Flexible Funding campaign and raise less than your worst case scenario budget?
In my opinion, you should use these funds only if you can make up the difference between your worst case scenario budget and the amount you raised. How can you deliver the film you promised if you can’t afford to make it? Answer: you can’t. And if you can’t make up the difference, then you’re stuck “reaching out to your contributors directly to issue any refunds… [because Indiegogo is] unable to… issue mass refunds for any campaign.” In addition to the hassle and embarrassment, you probably will be dipping into your own pocket, because Indiegogo will have collected its fees from the amount you raised.
All of this to say, proceed into Flexible Funding territory with caution. For a nuanced look at Indiegogo’s Flexible Funding paradigm, consider this article on Crowdfund Insider.
The 4 Keys to a Successful Crowdfunding Campaign
Once you’ve chosen your platform, you can begin to build your campaign. A successful campaign revolves around “The Four P’s of Crowdfunding”, as identified by Trigonis: the Pitch, the Perks, Promotion, and Personalization.
Just as your pitch reels in donors and investors in the noncommercial and commercial arenas of independent film financing, so your pitch in the crowdfunding arena is responsible for piquing interest that can convert to support. But instead of pitching in person over lunch or in an elevator, you make your pitch in the form of a short video.
The Tao of Crowdfunding outlines four basic components of a successful pitch:
- The Introduction: Introduce yourself. Tell us your name; let us into who you are. Dare to be vulnerable and reveal your personality. People give to people! This is your opportunity to prove you’re a person who cares about more than a product.
- The Pitch: Having demonstrated your humanity, tease us with a glimpse into your film and mention practical details like timeline and budget. Explain why you’re coming to the crowd, and mention the rewards – the “perks” – that you’re offering.
- The Showcase: We know you’re a person, we know you’ve got a project, and we know you’re ready with perks. Now prove you’re the real deal. The showcase is where you strut your filmmaking stuff. You’re building credibility, here, which we discuss in the first post in this series.
- The Call to Action: It’s time to let us, the crowd, know what we can do to help! Direct our steps to support.
It’s important to note that these are guidelines, not rules. You should address all four components above, but feel free to do so in a way that makes sense for you and your film.
Let’s examine three pitches that led to successfully funded projects:
H Positive, £20,043 of £20,000 Raised, Pitch TRT 02:42. Glenn introduces himself and rolls naturally into the concept of his film, teasing us with philosophical questions that reveal what fascinates him personally. At 01:11, Glenn transitions into a showcase featuring his commercial work. Glenn tells us how we can help and mentions the perks on offer. Finally, he highlights his team’s credentials and closes with an invitation to the viewer to consider his script, treatment, and storyboards. I admire Glenn’s transparency and feel like I’m being looped into the behind-the-scenes, here. It’s worth noting that the execution of Glenn’s pitch is a showcase in and of itself, quietly proving his ability.
Almost There, $26,089 of $20,000 Raised, Pitch TRT 04:09. Dan and Aaron weave highlights from their finished documentary feature throughout their pitch, proving their filmmaking prowess. They also involve Peter, the film’s subject, in its production. We’re intrigued by Peter’s quirkiness and impressed by the rapport that Dan and Aaron have with their subject. This approach seamlessly blends introduction and showcase, suggesting the filmmaker’s personality and film’s potential throughout. At 02:22, Peter, Dan, and Aaron transition into their call to action and casually tease the perks on offer. They leave us with a heartwarming appeal and “thank you”.
Bokeh, $48,627 of $35,000 Raised, Pitch TRT 02:34. Bokeh’s pitch plays to showcase. It begins by teasing the film’s setting and characters. At 00:23, Jeffrey and Andrew introduce themselves and their film. They provide an overview of the plot, supplementing intriguing clips with directorial commentary, promising “a personal story” about the end of the world. After an atmospheric interlude, the filmmakers introduce the cast at 01:38, followed by the revelation that they’ve shot at over sixty locations in Iceland. At 02:15, they make the call to action, asking us to support post-production. Jeffrey and Andrew close with a brief “thank you”. Ultimately, Bokeh’s pitch exudes mood that suggests the film, trusting it will connect with potential supporters.
Three different films with three different pitches. Each pitch is structured to accommodate the unique characteristics of each film, but they all include the components outlined above.
H Positive makes smart use of BRoll relevant to its concept, while Almost There and Bokeh feature footage from their actual films. What do you do if you don’t have as many visuals? What if you’re in pre-production and have yet to start the cameras rolling?
For inspiration, check out Jocelyn Towne’s pitch for I Am I. It raised $111,965 of its $100,000 goal! The single shot execution, together with Jocelyn and her team’s amazing personalities, hold our attention and invite us into the family. This is a clever, low budget pitch that proves the power of good ideas.
As donors and foundations enjoy contributing to films with which they resonate, so the crowd enjoys supporting films in which it believes. Ultimately, however, the average supporter is closer to an investor than to a noncommercial funding source. Where an investor expects a shot at profit, a supporter expects the perks he’s promised.
Part of designing your crowdfunding campaign is creating your perks and factoring them into your rewards levels. For example:
- Pledge $1: Receive a “Special Thanks” on the film’s website.
- Pledge $5: In addition, receive access to an online production diary chronicling the creation of the film.
- Pledge $10: In addition, receive access to a “musical inspiration” playlist curated by the director.
- Pledge $25: In addition, receive a download of the film before it’s released.
- Pledge $50: In addition, receive a DVD and “Special Thanks” mention in the film’s credits.
You can set a rewards level at any amount. With Kickstarter, there is a maximum pledge amount that “varies based on a project’s country of origin”; for US-based projects, that amount is $10,000.
While you’re free to create a $10,000 rewards level, Indiegogo shares some interesting insights that may help guide your pricing regardless of platform:
- $25 perks are the most frequently claimed.
- $100 perks raise the most money and often make up nearly 30% of total funds raised.
- Do the math and make sure you’re not losing money (factor in shipping costs, manufacturing, and time)… [Create] realistic perk that… you are able to fulfill.
Indeed, while it’s good to offer supporters exciting perks, don’t overcommit! The last thing you want to do is lose the credibility you’ve worked so hard to build. Weigh your availability against how long perks will take to create and deliver. Balance realism with sweet incentives.
And what, pray tell, makes a sweet incentive? The perks examples above are substantial but generic. Get creative with your offerings; the more personal you can make them, the more memorable – and potentially valuable – they may become. What if you offered a signed DVD at the $50 level? This could incentivize people looking for a deeper connection to your project, as well as people for whom a standard DVD and “Special Thanks” mention are not worth the extra $25.
In keeping with its cleverness, I Am I offered some creative perks. For example, at the $200 level, “[a]ctor Simon Helberg [The Big Bang Theory] will record a PERSONALIZED outgoing voice message for your phone!”
You probably don’t know Simon Helberg, and even if you did, a custom voice message might make little sense in context of your film. What creative perks can you offer that would make sense? Trigonis advises you to “maximize the connections you make between your actual film and the perks you’re offering during your campaign.” For example, if you’re fundraising for a documentary in Southeast Asia, you might create a rewards level that includes a handmade souvenir from that part of the world.
Broadly speaking, Kickstarter identifies five categories of perks:
- Copies of the Thing: The album (physical or digital!), the DVD, a print from the photo exhibition.
- Limited Editions: Backers love limited editions. They celebrate the special role backers played in helping the project come to life.
- Collaborations: A backer appears in your comic. Every backer gets painted into your mural. Two backers do the handclaps for a song on your record.
- Experiences: A visit to the set. A phone all from the author. Dinner with the cast. A concert in your backyard.
- Mementos: Polaroids sent from location. Thanks in the credits. Meaningful tokens that tell a story.
In particular, neither platform permits financial perks. This may change with The JOBS Act, still a work in progress, which would usher in a new age of equity crowdfunding. Essentially, non-accreddited investors – ie., people not wealthy enough to protect themselves and/or hire investment advisors, as determined by The Securities and Exchange Commission – would be able to invest in indie films and other ventures. There are a lot of questions surrounding this possibility, not to mention a healthy dose of skepticism, but the future remains to be seen.
While there are people who comb Kickstarter and Indiegogo looking for projects to support, they are the exception to the rule. Most of your support will come from your community.
Of course, your community can’t back your film if they don’t know about it! Generally, a successful crowdfunding campaign necessitates sustained promotion. Get the word out, first to your friends and family.
Danae Ringelmann, co-founder of Indiegogo, revealed a startling secret in her 2012 interview with Wired:
We see that campaigns that raise the first 30-40 percent from people they know before stranger dollars start to come in reach their targets… [So w]e encourage people to soft launch their campaigns and get the first… 30 percent of funds from people that know them and can validate them. Once that happens, do a hard launch and start to reach out to friends of friends, bloggers or influencers… [O]nce people start to find you they’ll be prompted to tweet you and naturally and organically their friends of friends will start to discover it – that’s how you amplify your campaign.
Social proof is powerful. It gets the credibility snowball rolling.
To keep it rolling, stay engaged with your campaign, both in person and online. Use social media, but don’t overlook email.
As old-fashioned as it may seem, email remains a fast-growing communication technology that’s more profitable than its counterparts. According to a 2011 study by the Direct Marketing Association, “email marketing yields a return of $40.56 per dollar spent, compared with $22.24 for search… [and] $12.71 for social networking”. That’s 55% more profitable than search, and 31% more profitable than social networking. Granted, crowdfunding isn’t marketing per se, but there is a fair bit of overlap. Collect and use your community’s email addresses!
Note I said use, not spam. There’s a fine line between updating and harassment.
“I told contributors in an early email that if they want monthly updates, they should visit… [my film’s] website or subscribe to its RSS feed,” Trigonis shares. “[I]f they want more frequent updates, they should add me as a friend on Facebook; if they want real time updates, Twitter’s the way to go. By wording it this way, you give your contributors the choice of how they’d like to be updated about your project”.
How often should you update via your social networks? Ringelmann observes that “[c]ampaigns that use them every one to five days raise 100 percent more money than those that don’t.”
Even so, you must be careful not to flood these channels, and you must understand that every communication is an opportunity. You can squander this opportunity by driveling uninspired updates (“help me make my film!”), or you can seize it by instilling every communication with personality. If you’re feeling especially creative, you can “maximize the connections you make” between your film and your updates. Several years ago, I co-wrote and co-directed a short film on a train, which would have lent itself to such puns as “Climb Aboard at Kickstarter Central” and “Don’t Miss Our Final Departure on [Fundraising Deadline]”. Cringe worthy? Probably. But nonetheless relevant, memorable, and endearing.
To avoid drowning in your campaign, you should bring your team aboard. Involve your producer, enlist the support of your actors, perhaps involve a social media manager. If you’re running your campaign with four or more people, Indiegogo statistics suggest, you’ll raise 70% more money than if you’re working alone.
Ultimately, you and your team must play to your passion more than your need. Invite, don’t beg, support. Remember that the crowd is more akin to investors than to noncommercial funding sources; supporters expect to realize value from their contributions.
Remember, too, that a contribution is not just about the money. It’s also about building an audience that will support you throughout this and future ventures, so don’t take the cash and shut out the world. Crowdfunding facilitates direct communication between consumer and creator, collapsing the space between them. Consequently, the creator is positioned to convert a casual consumer into an invested fan. Make people feel like a part of the team and they will act like a part of the team, spreading the word about you and your film, expanding its reach beyond its niche.
Which brings us to the fourth and final “P”, upon which we have touched throughout. People give to people. Dare to be vulnerable, and you stand to gain. This is the lifeblood that animates the other “P”’s.
The Beauty of Niche Filmmaking
In ages past, companies were obliged to make educated guesses about products the masses desired. This system still exists – we need look no further than Hollywood and its blockbuster mentality – but the technological advancements of The Bronze Age have birthed alternatives in film financing and distribution.
Specifically, as independents, we don’t have to start by considering “the masses”.
Instead, we can make the films we want to make for the niche(s) we intend, with the possibility of reaching “the masses” in the future. It’s a bottom-up, not top-down, approach. “What I love about Kickstarter,” Glenn shares in his pitch for H Positive, “Is that it gives filmmakers an opportunity to make smaller, personal films without having to sign away any artistic freedom.”
Simply put, in the words of Gladiator’s Proximo: “Win the crowd and you win your freedom.”
Give them something they’ve never seen before and conquer the crowdfunding arena.
We hope our independent film financing series has prepared you for battle, whether you’re competing in the noncommercial, commercial, or crowdfunding arena(s).
If your fundraising campaign meets with victory, congratulations, and prepare for the long and exciting road ahead. If, however, you meet with defeat, then remember Roosevelt’s words:
Nothing in the world is worth having or worth doing unless it means effort, pain, difficulty… I have envied a great many people who led difficult lives and led them well.
Get back on your horse, soldier, and carry on.
What do you think? We would love to hear about your experiences with film financing, large or small, in the comments below.
Michael Koehler, with
For more details, look back over the rest of our in-depth series about how to finance your indie film:
Part I – Beginner’s Guide to Independent Film Financing
Part II – 3 First Steps to Finance Your Indie Film
Part III – How to Get Donations and Grants for Your Indie Film
Part IV – How to Find Investors for Your Indie Film
Part V – How to Use Crowdfunding to Finance Your Indie Film
If you’re looking first to learn how to make a film, we invite you to check out our affordable online filmmaking course – more curated than a blog, more interactive than a textbook, more flexible than traditional film school.
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