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Businesses, Artists Turn to Kickstarter to Crowdfund Their Ideas

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Dizzy's Donuts, currently Boulder's only shop dedicated to America's favorite o-shaped confection, opened quietly on Sept. 1.

Despite a lack of major publicity, the donut shop at 1606 Conestoga St. has been selling its unique creations -- which come in varieties that include maple bacon, crème brulee and key lime pie -- as fast as the small staff can make them, selling out nearly every day it's been open.

But therein lies the problem for Dizzy's owners Eric Guthrie and his wife Jane Boggs-Guthrie. In order to expand their business, they need to increase their production capacity, and, to do that, they must buy more kitchen equipment -- about $12,000 worth, they figure.

"We're really bare bones here," said Guthrie as he weighed out dough at 10 p.m. on a recent night, a process that keeps him in the shop overnight every day in order to have a display case full of fresh treats each morning. "We need more equipment to make more doughnuts.

"We can make close to four hundred a night. Our main focus is getting that number bumped up."

Enter the world's most successful online crowdfunding platform for creative projects: Kickstarter.com.

Kickstarter allows anyone to donate as little as $1 to creative projects that artists and entrepreneurs such as the Guthries pitch via a video and plan of action. The website allows supporters to commit donations to specific projects in return for pledge rewards that vary based on the project and size of donation.

Projects open with a target fundraising goal, and those who pledge aren't actually charged unless that full amount is committed -- it's all or nothing for those trying to get funded.

"If a project is $1 short, then everybody's pledge is canceled and no money changes hands," Kickstarter spokesman Justin Kazmark said. "It kind of protects the creators because they know they can only move forward if they have the money to do so."

Kickstarter has been very popular in Boulder, which, outside of Denver, is by far the most active city in Colorado on the site.

Boulder's 94 ongoing projects -- including 82 that have been successfully funded -- are more than the next seven Colorado cities combined, and more than double that of the next Colorado city, Colorado Springs, with 39. Denver, a city with a population roughly six times that of Boulder, has 272 active or successful Kickstarter campaigns.

As of mid-September, more than $1.1 million had been pledged to Boulder projects, Kazmark said.

For the owners of Dizzy's Donuts, Kickstarter was appealing in their efforts to raise enough money to buy a second deep fryer, another industrial-sized mixer and a convection oven, among other needed items. They launched their project in mid-August.

In

the case of the Dizzy's campaign, rewards started at a free half-dozen doughnuts for 30 backers who pledged between $10 to $24. For the one backer (or group of backers) who pledged $1,000 or more, the reward was a doughnut party for 15 people, four Dizzy's T-shirts, four coffee mugs, two coffee cards and a free baker's dozen every month for a year.

"It seemed like a good way to get people involved in it and make them feel like a part of it," Guthrie said. "I'd rather pay them back with a pledge reward than pay financing charges to a corporate bank."

'Narrative arc'

CEO Perry Chen and friends Charles Adler and Yancey Stickler launched Kickstarter in New York City a little more than three years ago.

Chen came up with a rough idea for the site in 2001 when he considered promoting a concert in New Orleans but could not get financial backing for it. He was not sure what sort of response the event would get if he sponsored it himself and could not afford to lose money, so the idea was scrapped.

Stickler and Adler also noted issues with artists, musicians and other creative people finding funding to launch projects, and worked with Chen to launch a site that would help creative people gauge interest in their ideas, which eventually became Kickstarter.

Kickstarter has specific guidelines that creators must live up to, the company spokesman, Kazmark, said, but it is ultimately up to backers on the site to determine worthiness and validity of projects.

Aside from creators being required to "create an economy" around their projects via pledge rewards they agree to deliver to backers, Kickstarter requires that all campaigns are all-or-nothing regardless of whether they are active for one day or the maximum 60 days allowed on the site.

"For the backers, it creates this narrative arc with a sense of urgency to push it past the finish line," Kazmark said. "As the project moves toward deadline, if it's short, backers push it forward."

Kickstarter is now the largest crowdfunding platform in the world for creative projects, Kazmark said. It has led to the successful funding of nearly 30,200 projects, with a combined total of $370 million pledged to projects, according to the most recent company statistics.

Risk of overfunding

Andrew Hyde is no stranger to new, creative ideas, thanks his role as host and curator of the annual TEDx Boulder event, which features a series of talks, performances or demonstrations on various topics. This year's event was held Sept. 22.

Hyde is very familiar with Kickstarter. He has a personal relationship with Chen, the company's CEO, and has launched two successful campaigns on the site himself.

In April 2011 he launched a project called Record Monsters, for which Hyde and a few friends produced laser-cut vintage vinyl records that could be broken apart into pieces and then assembled into three-dimensional animal models.

"As far as for artists, it's a fantastic thing to use," Hyde said of Kickstarter, noting that one of the most common issues he has seen for art projects is overfunding to the point where a project gets too big for its originator, as almost was the case with Record Monsters.

"I think Boulder as a whole hasn't really latched onto (Kickstarter) as it should," Hyde said. "I would view Boulder as an art scene really developing and trying to figure out how to support itself long-term. It seems very fringe. I would view (Kickstarter) as a way for it to become more sustainable."

'Emotional excitement'

One recent Boulder Kickstarter project Hyde said he was particularly fond of is SoundPuddle.

SoundPuddle is an interactive environment that merges audio and visual stimulation through the use of a thousands of solar-powered LED lights and an electronics board that picks up sound and translates it into a visual display channeled through those lights.

The installation's LED bands form a dome that, with a parachute draped over it, creates an interactive virtual environment in which all sounds picked up by its microphone create a corresponding spectral color pattern, according to its creators.

"We had this idea of a sound wave rippling out from the center, thus SoundPuddle," lead designer John English said. "You can experience the content of the sound you're making right this instant, as well as the visual pattern you're making."

English, an electrical and mechanical engineer and co-founder of local design firm Boulder Engineering Studio, launched the SoundPuddle Kickstarter campaign on July 16.

With a funding goal of $4,600, the SoundPuddle campaign aimed to fund construction of a new electronics board for the installation, expand its solar power capacity and increase its LED array.

"Wanting to push it forward, but not really wanting to go into debt, Kickstarter seemed like the way to go," English said.

Thanks in part to pledge rewards like a video of SoundPuddle reacting to the audio file of the backer's choosing and personal copies of the electronics used to create SoundPuddle, the campaign raised $5,375 by its Aug. 9 deadline. Much of the money came from friends of the developers and a substantial amount came in at the last minute, English said.

"There is a lot that comes in at the end and I think there is a bit of emotional excitement, which is kind of what Kickstarter is all about," English said. "There were some really awesome contributors. A lot more of it came from the immediate community than I expected."

Falling short

Because of its all-or-nothing guidelines, Kickstarter projects have about a 44 percent success rate, according to the company. While there are 82 successfully funded Boulder projects at the moment, there were an additional 78, as of mid-September, that failed to reach their goal, Kazmark said.

That includes Dizzy's Donuts -- which, as of its deadline last month, only raised $6,105 toward its $12,000 goal.

While the Guthries were disappointed to fall short, Jane Boggs-Guthrie said the campaign was an interesting experience.

"It was exciting to watch it build," she said. "It was fun to see customers that knew we were doing the campaign come in a ask about it. That was nice."

At the very least, Boggs-Guthrie said launching a Kickstarter campaign got her to look at other projects on the site, many of which impressed her.

"That part was enjoyable," she said.

Boggs-Guthrie said she and her husband have received much support from customers who backed the project, many of whom have said they would still like to donate to the business's expansion plan, even if it's not via Kickstarter. The Guthries are looking at other options to fund their plans.

Until then, they will continue making doughnuts as quickly as their equipment allows.

Boulder on Kickstarter

To take a look at Kickstarter campaigns coming out of Boulder, visit kickstarter.com/discover/cities/boulder-co . Here are three examples of how local entrepreneurs and artists are using Kickstarter:

Yin Yang Hot Sauce: Boulder's Small Batch Organics has been selling small quantities of its habanero and fruit-based sweet, spicy sauce since 2009, but is seeking funding help to fill an order for a 50-store natural foods retail chain, and take the product to the next level. As of Saturday, the project had raised $459 toward a goal of $7,000.

Wisdom Cards for a New World: Inspired by Matrona midwifery immersion and the movement to return birth to the family, the project creator is seeking to produce 100 decks of handmade cards using artistic designs to spread insight inspiration and playful and profound ideas. As of Saturday, the project had raised $450 toward a goal of $1,750.

Rocky Mountain Revels: An Appalachian Christmas: The Colorado chapter of the tradition-preserving Revels performance group is seeking funding for its annual Christmas show, coming to Boulder Theater on Dec. 16 and 22. As of Saturday, the project had raised $25 toward a goal of $2,500.

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