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Economic Evolution in the Great Lake State
Mon June 4, 2012
reWorking Michigan: Raising Money With Kickstarter
Some local entrepreneurs in need of start-up funding are turning to Kickstarter. It's a website for raising those crucial first dollars that can get a project started.
NyShell Imari is a young poet from Lansing who needed to raise money so she could publish some of her work. To do that, she turned to Kickstarter.
“I was hoping to raise $700,” Imari says. “That was to go towards the publication and distribution of the book. Online, within the 30 days, I was able to raise $825.”
With that money, Imari has published Scarred: The Beauty In My Pain.
At Kickstarter, you set a dollar goal, and people who like your project make contributions in any amount they wish. If the goal isn’t met in a pre-determined time, no money is exchanged. If the goal is met, Kickstarter collects five percent of the proceeds. Credit card processing feeds take another three to five percent.
Imari says it helped her reach beyond her immediate circle of friends and family.
“I was amazed at the number of people who did not know me personally,” Imari continues, “from different cities, different states, who were willing to invest into my project simply based on the information that was provided on Kickstarter. So, it was a wonderful experience for me.”
Imari’s project was modest in scope. Jesse Hahn’s was bigger when he was starting up his Trailer Park’d food truck business, where a generator hummed in Old Town Lansing during the lunch hour last week.
“Basically, we had a goal of $5,000,” Hahn explains. “I took out a loan for the trailer and the truck, and then we needed about $5,000 to finish fabricating what we needed inside: induction burners, a hood extension, things like that…the triple sink that we had to put in. We’re just a mobile kitchen. We did it (reached the goal) in 30 days.”
You can encourage people to give with incentives. Hahn estimates that the Kickstarter fees plus his incentives added up to $900.
"Shirts and bumper stickers, all that fun stuff,” Hahn says, “which is all stuff we would have done anyway, but we did it sooner so that we give back to the people that showed the support for us. That’s just free advertising for us as well, so it’s kind of structured in a fashion that it’s constantly building your network.”
Kickstarter doesn’t work for everyone. Travis Post of Lansing is a budding filmmaker who tried to raise $90,000 for a movie with the working title of I Stole Your Pool. He dreams of success like that of Clerks, the ultra-cheap independent film that went on to make millions.
Post says…well, let him tell you about the results.
“We had one backer. It was me,” Post confesses. “I donated $1.The first goal did not work out as good as we wanted it to.”
Undeterred, Post has pulled the Kickstarter campaign and will try again, with a lower goal of $50,000.
The people at Kickstarter declined to be interviewed for this story, but one report indicated that last year, more than half of the 27,000 Kickstarter project launches failed to reach their goal.
There’s been some grumbling that Kickstarter hides unsuccessful projects. While they don’t drop such projects, the company says some creators want them to de-index their projects so their failures don’t turn up at the top of web searches.
Jesse Hahn, though, says it wouldn’t be an exaggeration to say that without Kickstarter, there wouldn’t be a Trailer Park’d or the Fork In The Road restaurant he opened last year.
ReWorking Michigan examines our evolving economy, as citizens of the Great Lake State explore new ways to make a living and build a future for their families. A project of WKAR NewsRoom, WKAR-TV and WKAR Online.