Crown Funding: a short story

Need funding for your business? Crowd funding is an alternate method, but it's not for everyone and it's not a sure thing.

When Heather Anne Leavitt found a great new location for Sweet Heather Anne, her boutique cake studio in Ann Arbor she turned to crowd-sourcing to help her make the leap to her new digs.  With a 40-day Kickstarter campaign Leavitt raised $8,420 in 40 days, allowing her to sign a new lease for her cake studio and as a bonus, create a great marketing campaign for her business.

 More than six months after the campaign ended, Leavitt is still running into people who learned about Sweet Heather Anne through her Kickstarter campaign. Details about her campaign can be found here http://www.kickstarter.com/projects/1063970568/cakestarter-0?ref=card

Since its launch in 2009, more than $350 million has been pledged by more than 2.5 million people funding more than 30,000 projects, according to Kickstarter.com. Those who seek funding through Kickstarter set a monetary goal for a specific project with a deadline. If they do not meet their fundraising goal by the deadline, they do not receive funding for the project.

David Klingenberger’s successful campaign to create 40 barrels of his probiotic, raw sauerkraut through his Ann Arbor-based company The Brinery, came about after he researched a number of crowd-sourcing options and chose Kickstarter.

“I chose it because of the kind of buzz that Kickstarter has created already,” he said. “It sets the tone and creates the urgency.”

While both Klingenberger and Leavitt were apprehensive about the chance that their projects might not get funded, they both saw their supporters step up and provide the remaining funds to meet the campaign goals.

“Toward the last week I really started to get some donations that made it happen,” Klingenberger said.

Here are tips from them about conducting a successful campaign.         

Make sure you have a strong social media network in place before starting your campaign. Both Klingenberger and Leavitt had Facebook pages with plenty of fans before they began their campaign. That allowed them to appeal to their fans for help with appeal e-mails and posting updates to their individual Facebook pages.

“I was very active on Facebook,” Leavitt said. “I think using Facebook was how we got most of our support. The viral aspect of Facebook is the kind of thing that really makes Kickstarter work.”

A video of you is a must. Kickstarter estimates that 50 percent of all projects that use a video will be funded versus 30 percent for projects that do not include a video. If you are not video-savvy, find a friend who can help you. In Klingenberger’s case, his video was made by a friend who has dreams of being a farmer one day.

Do your Kickstarter homework. Klingenberger and Leavitt both said they spent hours looking at other campaigns taking note of the kinds of rewards people offered for their donors, the wording they used to in their Facebook posts, and even the stories they told about their businesses.

“Find someone who has done a successful Kickstarter and find someone who has done an unsuccessful Kickstarter,” Klingenberger said. “A lot of times they are the same people. That was really helpful to me.”

Don’t make Kickstarter your only hope. If a business has just opened and it is looking for funding to start it entirely, Klingenberger is not as interested in it.

“I feel like it should be one aspect of getting a business going,” he said. “It shouldn’t be the only tool in the tool box.”

Cyndi Lieske for SCORE

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