Social funding is probably one of the most interesting developments to come out this year. Fund-raising on the internet is nothing new and everything from raising money for medical treatment, restoring stolen property, buying a new computer or whatever. Pledge and donation buttons abound on the internet. However, as anybody displaying those buttons will tell you it is hard to raise money alone. One thing Kickstarter and similar startups have changed is the notion of social funding. Many have noted how little it takes to create an internet startup with the commoditization of servers and freely available open source tools, all you need are imagination and drive to really bring something to reality. However, that doesn’t mean that you don’t need money.
Social funding allows creative, ambitious individuals to quickly gain initial capital to make their visions reality. A tour of popular projects on Kickstarter represents a wide variety of projects from music, film, design, to software. Backers or sponsors agree to pledge a fixed amount as set by the project originator. If funding reaches the goal amount by deadline, backers get charged. Otherwise the project fades out. Successful projects must then provide the output promised and deliver goods to backers. Most project goals are in the range of several thousand dollars with pledges starting at $10.
The beauty of this approach is that supporters also form your core audience helping to spread the word through social media such as Twitter or Facebook. It’s hard to dismiss a friend raving about a project that they just donated $10 as spam, because they are putting money where their heart is.
Diaspora, the project to create an open-source, distributed, and self-hosted version of a social network, raised over $200,000. The amount of money came with no strings attached and would put lots of angel rounds to shame. Although the initiative came at the right moment, just as Facebook tried changing user privacy to make things more “open”.
Getting a project fully funded means that the project must have a clear purpose. Since funding is effectively a donation, with a token material reward, it is no surprise that successful projects involve noble motives (change the world for the better) or have aesthetic resonance (eclectic art that strikes the right chord). Ensuring your project gets funded involves quite a bit of strategy that involves smart marketing in addition to presentation quality, although timely projects might get a chance push from word of mouth. However, the biggest appeal is perhaps the lack of strings attached and the low risk for both project organizers and supporters.
Whether your field is IT, music, film or performing art, it is now possible to make your vision a reality with the right amount of preparation using tools readily available to you. Being savvy with social media is no longer about being internet popular but a way to find an audience and now there are a growing number of ways for people to tap into that pool for micro-funding.