Crowdfunding Coaches: How to Make Money from Those Trying to Make Money on Kickstarter. The Perfect Kickstarter Project Presentation: Experiences from the Best and Worst Kickstarter Campaigns Submitting Examples Money Transfer Control

Target: 50 thousand dollars.

Collected: more than 13 million dollars.

Idea. In 2014, Ryan Grepper decided to create a portable refrigerator of the future that would cost just $185. In addition to the banal cooling of food and drinks, it can:

• mix drinks and grind ice using the built-in blender;
• play music, as it is also a wireless speaker;
• Charge a couple of devices via two USB ports.

You can also use it to prepare a salad or cut meat for barbecue. The knife is not scary for him, since there is a special coating. Inside there is a compartment for utensils, an opener and a place to store knives, and there is also LED lighting for evening gatherings.

In general, a dream for lovers of picnics and outdoor recreation. It’s no surprise that the required $50,000 was raised in just 36 hours! And a month later the amount exceeded $13 million, which is even more than the first Pebble. 56 thousand people were waiting for the refrigerator and, according to Ryan Grepper, they were supposed to receive it in February 2015.

What happened. But in February 2015, no one received the refrigerator. People understood and forgave: after all, it was a large-scale campaign, a delay of a couple of months was not critical. And they waited a little, and then a little more. The manufacturer periodically reported problems with either the battery or delivery.

jeremybrigden.com

By the end of summer 2015, only 3 thousand out of 56 thousand people received a refrigerator. Sponsors' dissatisfaction grew, but the surprises did not end there. In the fall, the coveted refrigerator went on sale on Amazon for $500 instead of the originally announced $185. Ryan Grepper explained this by saying that he had not calculated the shipping cost and did not have enough money. It turns out that Amazon buyers paid shipping to the Kickstarters.

Even now, in May 2016, Coolest Cooler has not yet reached all customers. So it turned out that one of the most successful campaigns on Kickstarter turned into one big scandal. And the only thing left to blame here is illiterate management.

Laser razor Skarp

Target: 160 thousand dollars.

Collected: more than 4 million dollars.

Idea. Imagine shaving without cuts, irritation or expensive replacement blades. The idea is great, and 20 thousand investors who invested about 4 million dollars in the Skarp project agree with me.

Skarp is a laser razor, which, according to the developers, should replace the usual razor with blades. The laser carefully cuts hairs, eliminating cuts and irritation. The razor runs on a regular AAA battery; one battery lasts for a month. People liked the idea of ​​the device, and 24 days before the end of the campaign, approximately 250 thousand dollars were collected.

What happened. The idea is, of course, cool, but how feasible is it? Many began to doubt the reality of the project, if only because there was not a single real image of a razor. Just renderings and promises. The operating principle of the device also raises questions. According to the manufacturers, the laser beam should simply cut the hairs, like a regular razor does. But this is hardly possible, because this would require a laser that is several times more powerful than a laser pointer. It will, of course, cut off the hairs, but it will also leave a severe burn on the skin.

The inventors answered all the questions with a video in which they cut off five (!) hairs in two minutes. Such a demonstration of the device’s capabilities gave rise to even more doubts. As a result, Kickstarter simply closed the project due to the lack of a working prototype.

But it seems that this was not a big disappointment for the authors of the project, since it soon appeared on Indiegogo. On this site, real prototypes are not required, and in three hours, 34 thousand dollars out of the declared 160 thousand were collected. Naturally, no real images of the razor have appeared, so I think this is nothing more than the work of scammers.

Nanodrone Zano

Target: 190 thousand dollars.

Collected: more than 3.5 million dollars.

Idea. The authors of the project decided to create a small drone that can fly and shoot video in high definition. The baby had to fit easily in the palm of your hand and could be controlled using a smartphone or gestures. The idea was to make the controls as simple and convenient as possible, which any person could master.

The potential capabilities of Zano are, of course, amazing. Thanks to a variety of sensors, the drone had to fly almost autonomously, avoid obstacles, shoot and broadcast streaming video for at least 15 minutes. They promised support for wireless charging, video stabilization and even a thermal imaging camera. A tempting set of functions for such a baby.

There were many people who wanted to get Zano, and they managed to raise more than $3.5 million. The developers promised to deliver the drones in June 2015.

What happened. And it turned out to be one of the biggest scandals on Kickstarter. According to the already familiar pattern, the creators of the project first fed sponsors with promises and postponed deadlines several times. As a result, having missed all deadlines, they sent out a couple of hundred half-dead drones (with 3 thousand customers). The gadgets turned out to be of terrible quality; they were only able to rise a few centimeters above the ground, after which they flew into the wall. There was no trace of any autonomous flight or avoiding obstacles.

This caused a wave of indignation, which is why Kickstarter even had to hire famous journalist Mark Harris to conduct an independent investigation. Naturally, everything turned out to be a lie; videos demonstrating the drone’s capabilities were falsified. The money was spent on personal needs, and when it ran out, the company declared itself bankrupt.

Peachy Printer 3D Printer

Target: 50 thousand dollars.

Collected: more than 650 thousand dollars.

Idea. Rylan Grayston and David Boe decided to make a 3D printer accessible to everyone. They developed a compact device called the Peachy Printer, which was supposed to be sold as a kit so that each user could assemble and configure the printer based on a specific task. The gadget was capable of printing even colored objects using eight mixable colors. In general, a useful thing, and for only $100.

Having collected more than 650 thousand dollars, the creators of the project promised that they would return soon, and disappeared for more than two years.

What happened. And then Rylan Grayston got in touch, announcing that his partner had spent most of the money on building his house. Since they did not have a joint account, all funds raised on Kickstarter went to David Bo's account. When Rylan asked to give him the collected money, David transferred only 200 thousand dollars. Before going to the police, Raylan decided to appeal to the conscience of his companion and demanded that he admit to the theft and return the money with interest.

David, of course, apologized, but returned only $107 thousand of the remaining $450 thousand. The rest went to the house. However, Rylan Grayston decided not to give up and promised to still send printers to customers, even without the full amount.

Ant Simulator

youtube.com

Target: 4 thousand dollars.

Collected: 4.5 thousand dollars.

Idea. ETeeski company decided to create the Ant Simulator game. As you may have guessed, in it you are asked to become an ant: extract resources, fight, build - in general, do the usual ant things. At the same time, the emphasis is on virtual reality, support for Oculus Rift, ANTVR and others is announced. In addition to third-party investments, the guys raised more than 4 thousand dollars on Kickstarter and were already preparing for open beta testing.

What happened. At the beginning of 2016, game developer Eric Tereshinski published a video in which he announced the closure of the project. It turned out that his partners and part-time best friends spent all their money on drinks, poker and strippers. According to Eric, almost all the money has been spent, so he cannot continue developing the game. Moreover, his ex-partners threatened Eric with legal action if he began to work on the project independently.

The moral here is simple: choose your partners wisely and do not trust them blindly, even if they are your bosom friends.

This is the selection that came out. It's a pity that many interesting projects fail simply because of stupidity and illiterate management. Well, Kickstarter should select projects more carefully, and also develop a support system for users affected by such situations.

So, you first became interested in a project on Kickstarter and decided to fund it. Let's take a closer look at how this can be done and what is needed for this.

First of all, pay attention to this window in the upper right corner of the project page on Kickstarter:

Counters 1, 2 and 3 show, respectively, the number of depositors, the amount collected (slightly below is the required amount) and the remaining days/hours for collections. Once the time expires, the project will be declared a success or failure and the opportunity to contribute will no longer be available.

Feel free to click on the Big Green Button with the inscription “Back This Project”.

In the highlighted window, indicate the amount that you are going to donate to the developer. Below we select the reward we want to receive for our generosity.

Option #1.

If the fundraiser is in English pounds (£), then payment is made directly through Kickstarter, and only using MasterCard, Visa or American Express bank cards.

Fill in information about yourself:

After filling out all the specified items, simply click the “Pledge” button. Ready!

Option No. 2.

Payment in dollars is also made only using a bank card, but with more options. Once you select your reward, you will be directed to Amazon.com.

If you do not yet have an Amazon account, enter your E-mail in the top field, select “I am a new customer” and click on the “Sign in using our secure server” button.

We go through the usual registration, after which you will be asked to fill out information about your bank card.

1. Select the card type.
2. Enter the sixteen-digit card number.
3. Enter the owner's first and last name.
4. We indicate the expiration date of the card.

Click “Continue”.

Enter all your data as indicated in the picture above.

We double-check all entered data, and then click the “Confirm” button.

If you have already decided to finance the project, there is no point in waiting and transferring money to the developers closer to the end of the fundraising - the money will be withdrawn from your account at the end of the Kickstarter campaign and only if the required amount is reached. You can change or cancel your payment at any time before fees expire.

And finally, many are faced with the problem of not having a bank card. If you don’t have the opportunity to get a card in the near future or you simply don’t want to do this, then you can get yourself a virtual bank card. For example, through WebMoney.

Are you a creative person? Do you have an idea about creating an invention that has no analogues? Or maybe you are planning to write a program/book/music? In any case, the idea, in your humble opinion, is wonderful.

But to implement it, you will need a certain amount of money, which will be used to purchase parts, software and other expenses. Perhaps your current savings are not enough, and you are afraid that while you save the required amount, you will have time to burn out on your project.

Don't rush to give up on your dreams. Kickstarter is here to help you and other creatives. It was founded in 2009 and involves a crowdfunding system - the collective collection of voluntary donations from all users.

The scheme is simple: on the website you describe your project in as much detail as possible, and those users who are interested in your idea transfer funds to you so that you can start implementing the project as quickly as possible.

The point is to collect the required amount of money within a certain period of time, otherwise the project becomes inactive, and the money already transferred is returned to users.

Through Kickstarter you can finance anything: the creation of high-tech prosthetics and gadgets, the filming of a new film, the publication of video games, music albums, comics, books, etc. This is a great platform where young and mature creatives from all over the world gather.

In order to attract the public's attention to your project, nothing supernatural is required.

How to launch your project on Kickstarter

• Register on the site, describe in as much detail as possible what exactly you want to create. This is partly done for the site’s moderators: they rather strictly review incoming applications and select the most promising ones. But it is precisely thanks to their work that there are very few projects on the site in which no one has invested.
• Show a diagram or a working prototype if you already have one. Necessarily upload photos and videos. The presence of a video, even an animation, significantly increases the chance of attracting investment to the project.
• State the exact amount that will be required to implement the project and indicate the time frame.
• Tell us about your project on social networks so that as many people as possible learn about it and look at the page with your project.

After that, you just have to wait and communicate with users. If people like the idea, you will quickly raise money and be able to get started. It is quite possible that there will be investors who are ready to donate more than one hundred dollars to you at once. Don't forget to thank your sponsors and customers and send them an exclusive copy of your product when it's ready with a personalized congratulations.

This spring, the Belarusian hardware startup RocketBody entered the crowdfunding platform Kickstarter, collecting twice the stated amount - $ 70,243. The CEO of the startup, Timofey Lipsky, shares details of the preparation of the campaign - how much they paid the “crowdfunding consultant”, how to calculate the amount of fees and why the team urgently had to take a group photo.

— With some reservations, I consider a campaign on this platform to be an obligatory stage of almost any hardware startup. Because this is an opportunity:

• Verify ideas in another market
• Get pre-orders (collection of metrics)
• Make PR for the project
• Gather the money

Exactly in this sequence. Any pre-orders are already numbers with which you can plan the economics of the project and communicate with investors.

CEO RocketBody

Let me make a reservation right away that we are a specific product for Kickstarter (KS): we have complex technology, our market is oversaturated, and our target audience is narrow (athletes). The KS audience will not read into the features of your product - they want a very superficial emotional benefit that will cause an impulsive purchase. Therefore, many very cool technological projects collect hundreds of thousands, and jackets and backpacks collect several million. Backers (those who invest in the project) on KS are a certain “caste” of consumers of the platform’s content, and it is critically difficult to bring people from outside this platform to pre-order. This is neither bad nor good, but simply worth considering. One of our mistakes was precisely this: although we simplified the description of the key technology as much as possible, many still did not understand. Or they didn’t want to understand.

I would divide the entire campaign into 6 stages: choosing a campaign goal, choosing a contractor, preparing for the launch, the first days and working with the audience during the campaign. There can be only 2 goals: raising money and marketing. Each requires a different approach. We needed marketing and pre-orders from athletes (to collect relevant data), so next I'll talk about preparing with that goal in mind.

Team photo - taken after a lot of negative comments appeared in the project that there were no team photos in the project

Selecting a contractor

You need someone to help you prepare and run your campaign. We have taken advantage of almost all types of cooperation:

1. Payment at a fixed rate. We hired a consultant for 2,500 pounds (about $3,350) per month, who knew the KS “kitchen” and helped with traffic, gave feedback on content, suggested how best to build mailing strategies, provided media contacts, and recommended other contractors. It helped relieve the stress of the campaign itself and the fear of the unknown. In my opinion, it paid for itself.

2. Percentage of paid advertising through referral links. Agencies collected buyer traffic and took a percentage for it. There are 2 options: you pay for the traffic yourself and 15% of the fee through the referral link for the agency’s work or the purchase of traffic is entirely borne by the agency, and you give 35% of the fee through their referral link. My opinion is that if you need promotion and have the means, then it’s worth a try.

3. Agencies that organize a turnkey campaign. They take the same percentage from referral links as the agencies from the point above, but still claim 5-15% of all organic traffic. This is where you need to be careful: after all, all your organic traffic will be covered by a commission. This option is suitable for those who want to outsource everything, but it is a bad strategy.

4. Agencies that have their own base of superbackers(that is, the regular KS audience). As I said above, KS has a loyal audience that buys almost everything! From an innovative pen and compass to a “time machine”. They don’t care what they buy, what matters is how emotional your company is. So, some agencies have several thousand such consumers. If your product is something mass-produced, “fun” and simple, then they will suit you.

5. Platforms that organize publication in the media for a % of sales from this publication. You choose the percentage yourself, and the higher it is, the more willingly they write about you. This is only suitable when you are sure that you have already rustled through all sorts of publications yourself.

My conclusion: the first option is good, since you first of all get a mentor, which helps you avoid many pitfalls. Our budget and strategy allowed us to work with a company for 35% of the traffic; this is certainly an expensive source, but it was important for us to look at the setup of other companies. Options with superbackers, turnkey campaign organization and media platforms were ineffective for us.

Preparing for the start

It is advisable to start 3-4 months in advance, the work will be in several directions:

1. Organization of fees, legal part. KS has tightened its fundraising policy; the main purpose of the restrictions is to cut off scammers. In addition to residency in a certain country, a number of other conditions must be met.

Having considered all the options, we opened a legal entity in the USA - this can be done without personal presence (for example, the Stripe service helps to open a company for those who go to Kickstarter, but it does not help everyone - especially rarely for companies from the CIS). We were lucky.

Next, to continue verification of the project creator on the platform, you need the SSN number (social security card) of a US citizen. It is clear that not a single American will give his insurance number to anyone, especially for KS. We had to use a possible and impossible network to find such a person.

But that's not all either. The last step will be to issue a bank card to a member of the board and enter the card data in the KS office. Only after this can you submit the page itself for review.

2. Buying traffic. You need to gather a loyal audience within a few months. This is necessary so that in the first days you make the maximum of all fees - which will attract organic traffic to the platform and the attention of journalists, and thereby give another + 20-30% of fees. This is a trivial purchase of advertising on Facebook and Instagram, endless creation of creatives and analytics. Also, part of the traffic ends up in your groups on social networks. To buy traffic, we turned to a Belarusian company, which worked better than a specialized consultant.

3. Working with an audience that has “settled” on social networks. This is where our next and, in my opinion, key mistake took place. It is necessary to launch an interactive activity and involve the audience in communication by any means, thereby expanding the base of loyal potential backers. According to statistics, 2−5% of the base will buy the product in the first days. To increase this percentage, you need to offer activities, sweepstakes, etc. We did not implement this due to ignorance and limited resources.

4. “Packaging” the project page on KS. The most important thing is the video that a Belarusian company also successfully made for us. Everyone watches the video. Next, beautiful renderings of the product and a working prototype are important, a guarantee that you are not a scammer (team photos, updates, etc.) and some more videos and gifs. The user will skip everything else and, at best, go to the FAQ section. All your content should be written in good English - do not neglect the help of native speakers.

The page will be checked by KS himself before launching. Most likely, he will find flaws and you will spend another 3-14 days on corrections.

5. Working with the press. We had about 200 contacts of journalists - the conversion rate was 10%. Don’t write dry messages to journalists - they are people to whom hundreds of people like you write every day. A little humor will help you reach the right person.

Click to enlarge:

Screenshot of a letter from Timofey Lipsky to a journalist. Provided by the author

The press release must be attached to the letter and fully prepared for publication. Most likely, before the start, 99% of journalists will ignore your message and will catch up only when you raise money, as was the case with us. We bought 2 articles and received approximately the same response from them as from free ones. By the way, media publications proved to be the cheapest channel, the lead turned out to be more profitable than anywhere else.

3 days campaign

These days you will most likely collect half of the total amount. To start, you must have a “charged” newsletter for your entire base, one day before, one hour before and at the time of start. You must connect personal connections and social networks as much as possible, make another mailing to all media, at this moment paid advertising on FB and Insta should be charged with the maximum budget for your most profitable audience, with the highest quality metrics.

Then all you have to do is wait and monitor the TOP of your category on the platform. By the way, after several days in the top, we still received purchases, but we had already changed the category to KS from wearable to product design in order to remain in the TOP longer. We also played around with time zones, depending on the time of day the project was from NY, and later from CA.

The goal of the entire campaign should be one that you are confident in for the first 3 days. This is calculated by the formula: 5% of your average check base + 30% from users of the platform itself + 10−20% your personal connections. We didn’t do this, but I would immediately launch a newsletter with the help of agencies with a large base of “superbackers”. When you complete your goal in 3 days, people will start writing about you, and then the task is to maintain interest for another 4 weeks.

“Life” of the project after 3 days

And then your daily collections drop, you get upset, but that’s normal. Now it’s important to make updates, change the Kickstarter page if your backers have questions, do live broadcasts on the platform itself, and actively respond to messages and comments. This must be done so that backers do not cancel their pre-orders - but they will cancel. Sometimes the cancellation amounts will be equal to the amount of pre-orders for the day.

For example, every week we had live events, at some of which I did pull-ups and push-ups to prove my competence as an athlete. Example:

Also, one of the stories was related to the lack of a team on the page - we did this on purpose so as not to irritate Americans with Belarusian names. The lack of a description of the team caused such a flurry of negativity that over the next 24 hours we took a photo, wrote a full history of the team, and uploaded my motivational video from a year ago (see below). It worked.

Among other things, it is important not to stop paid advertising on social networks, actively write to the media, and warm up a loyal audience on social networks with some kind of challenge. As a result, this will allow you to increase the total of the first days at least 2 times.

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conclusions

1. You must have a budget - at least as much as you plan to collect in 3 days.

2. It’s better to create a community of ambassadors for your product in advance. This will increase the influx of people in the first days and generate additional, free traffic.

3. Simplify the product as much as possible unless it conflicts with your strategy.

4. Don't lie and don't neglect communication with the audience.

5. Work with the press yourself. Often you will be asked specific questions about the product, and no one will tell you about it better than you. Also, don't be afraid to be intrusive.

6. Better hire native speakers to review all your content.

7. Don’t set a big goal - it’s not important to backers, but for PR it’s critical to collect it in the first day or two.

Today, such a complex word as “crowdfunding” may seem completely incomprehensible to people of the older generation and old-school businessmen, but among young, progressive entrepreneurs or startuppers and creative individuals, this term has firmly entered into everyday use in recent years. So what is the essence of crowdfunding?

The essence of this process is the open collection of funds for the implementation of a particular project. Projects are placed on one of the crowdfunding platforms, after which anyone can become a sponsor of the project. In this article, we will consider the main issues of financial security and legal aspects of launching a project on crowdfunding platforms.

Kickstarter (kickstarter.com)

It can easily be called the most popular crowdfunding platform. Part of this popularity is due to the fact that Kickstarter was a pioneer in the world of crowdfunding. Creative people, engineers and inventors from all over the world are striving to bring their project to this platform. The basic operating principle of the platform is all or nothing, that is, you are paid the collected money only if the planned amount is reached. If you don’t get a couple of thousand dollars, all previously collected funds are returned to the sponsors’ accounts.

So, creating a project on Kickstarter is currently available to individuals in the USA, UK, Canada, Australia, New Zealand, the Netherlands, Denmark, Ireland, Norway, Sweden, Germany, France, Spain, Italy, Austria, Belgium, Switzerland and Luxembourg .

An individual must meet the following requirements:

• be over 18 years of age;
• be a permanent resident of the above countries;
• register the project in your name or on behalf of the company you represent;
• have an address, bank account, identification card in the country in which the project is being created (if the project is being created by an individual, then its associated bank account must belong to a person who has passed the identity verification procedure and is participating in the project);
• have a registered and verified Stripe business account (stripe.com);
• have a credit or debit bank card.

As you can see, Ukraine is not on the list of countries, but this does not prevent our compatriots from conducting successful fundraising campaigns on Kickstarter. One of these Ukrainians is the team, which in just 2 days managed to raise $100,000 to implement their project. To repeat their success, it takes more than just a brilliant idea and a team. You still need to collect a substantial package of documents and go through more than one verification procedure. You can do this in the following ways:

1. Have a reliable partner on your team who is a permanent resident of one of the above countries and has an identity card ( ID), address, social security number, telephone.

Having such a partner, you can entrust him with the registration of all necessary documents, namely:

• registration of a legal entity;
• obtaining an address for a company;
• opening a bank account, receiving a bank card;
• registration and verification of your account on stripe.com.

Keep in mind that this person must be well aware of the specifics of completing the above documents and opening a company. It should be noted that getting such a person into your team, even for free, will be very difficult.

1. Use the services of an intermediary with successful experience in launching a project on Kickstarter.

The intermediary will help you prepare all the documents and create a company (or provide a ready-made one) to launch your project. This should significantly relieve you of your workload and allow you to fully concentrate on project creation, presentation and marketing. But you should understand that the intermediary will require proper payment for his services. Usually this is a fixed amount, approximately $1000 + 5-20% of the amount of funds you have collected.

To protect yourself from fraud on the part of the intermediary, it is recommended to enter into an agreement that clearly states the role of the intermediary, the price of his services, as well as the mechanism for transferring the collected funds to your bank accounts, since after the completion of the campaign, all collected funds are transferred to the intermediary’s bank account.

Of course, there is always a risk that the intermediary will not give up your collected millions, but if there is an agreement, you have every reason to go to court to protect your rights. This agreement is best concluded in the presence of a qualified lawyer who has previously reviewed the agreement.

It should be noted that the attitude of the Kickstarter administration towards the use of intermediaries is rather negative, but no one forbids you to include an intermediary in the project team and remove all possible claims.

1. Hire a consulting agency or law firm.

As in the case of an intermediary, the consulting agency will take on all the legal and financial hassles, but these services will cost more than the services of an intermediary. Also, a fixed fee is charged for the agency’s services, which means the consulting agency makes money regardless of whether your project is successful or not. In this regard, it is best to use the services of a company or agency with a name and reputation.

Taxes and commissions or how much money goes to the creator of the project?

After the successful completion of the Kickstarter fundraising campaign, it is time for the project creator to pay commissions and taxes. So here's how it happens:

1. After a successful campaign ends, Kickstarter charges a commission of 5% of the total amount you raised.
2. For every donation less than $10, the bank takes a commission of approximately 2.9% + $0.30 from each transaction, and if the donation exceeds $10 - 5.0% + 0.05% from each transaction.
3. If the creator of the project was an individual, then you must pay income tax, which varies depending on the country and the amount collected and can reach 50%.
4. Commission of an intermediary or consulting agency (if hired).

As you can see, taxes and commissions can significantly reduce the amount of funds you raise using Kickstarter, so you should create a budget necessary for the implementation of the project, taking into account all taxes and commissions. Also, in order to optimize taxation and select the appropriate country for your project, it is recommended to contact specialists experienced in these matters.

Ask questions and receive qualified advice from LEX LIGA lawyers in the comments!