When Grandview Theatre owner David Nedrow recently decided he needed a new
marquee to grab the attention of potential moviegoers, he developed a plan for
the look and size of the sign. But there was a problem: He didn't have the
money for it.
A few years ago, that would have been the end of the discussion.
But not today. Not in the fast-developing era of "crowdfunding."
Crowdfunding involves raising money through many small pledges of cash
online. One of the most popular vehicles for accomplishing that goal is
through the website Kickstarter.
Since its launch in April 2009, around 24,000 projects have successfully
presented their plans on Kickstarter.
Kickstarter has raised $323 million for projects. Starting a project is
free, but Kickstarter takes 5 percent of contributions if a project is funded,
and Amazon.com Inc. takes an additional 3 to 5 percent for processing the
payments. The funds are usually subject to taxes as well.
"It's hard to raise money for a small, for-profit company --although,
frankly, we operate like a nonprofit," Nedrow said. "That's why Kickstarter is
the way to go for us."
Kickstarter's model, which offers donors rewards such as T-shirts, coffee
mugs or samples of the products in lieu of equity in the companies, has scored
some notable successes. One of them is gaming startup Ouya Inc., which sought
funds for a new video-gaming console and raised $8.6 million, far surpassing
the company's original goal of $950,000.
"The nice thing about Kickstarter is that I can offer a $5 (donation)
package to a $1,000 package and everything in between," Nedrow said.
But one not-so-nice thing is that every project on Kickstarter is
presented in an all-or-nothing format.
Projects have a defined period --usually a month, maybe two --in which to
attract attention and hit their funding goal. If they miss that goal, no one
has to fulfill a pledge.
That situation recently happened to a crowdfunding project involving
James "Buster" Douglas.
Local author Tony Reynolds had written a book in 2009, Buster's Backyard
Bar-B-Q,, in which onetime heavyweight boxing champion Douglas shared his
story and some of the recipes and diet practices that helped him improve his
health after his struggles with diabetes.
The cookbook garnered good reviews, "but commercially it didn't do as
well as we would have liked," Reynolds said.
After the book went out of the spotlight, Reynolds and Douglas mulled a
way to revive it in a re-release. Such a project would, of course, require
money --both for the actual printing costs as well as for marketing.
So they posted it on Kick-starter and crossed their fingers.
"I got over 10 percent of our goal in the first week or two, so that was
great, but then it slowed down," Reynolds said.
The Douglas cookbook never hit its goal on Kick-starter.
Undaunted, Reynolds, who had some experience with the crowdfunding
concept, recently launched a new site, AKickInCrowd- .com , which differs
from Kickstarter in that it focuses primarily on sports, athletes and teams.
In addition to the Douglas cookbook, one of the first projects on the new
site is a proposed Buckeye football fan book --Urban Renewal, The Buckeye
