Just like any new business, a new performer often struggles with gaining access to borrowed capital. It’s not about you or your talent — lenders just like to see a track record of a few years under your belt and a history of making regular, periodic payments.
Professional entertainers who have been around a year or two, have a regular income, and can demonstrate consistent cash flow may find success borrowing, but it might not be at the bank. Fortunately, there are other attractive options for new performers that are worth considering, and crowdfunding is an increasingly popular way to secure capital.
Crowdfunding: If You Build It, They Will Come?
Unfortunately, nothing works quite as easily as it appears in the movies. The Field of Dreams reference is a common misconception about how easy it is to raise money via crowdfunding. Nevertheless, crowdfunding could be a good way to get your act off the ground financially, provided you take the right approach.
The following five suggestions will help you launch a potentially successful crowdfunding campaign, but there are no guarantees even if you follow these tips. It will all depend upon how successful you are motivating your fans and potential fans to invest in you and your business.
1. Do Your Homework
Spend some time on different crowdfunding sites like Kickstarter and Indiegogo to see if you can find the right place to launch your campaign. Are other performers finding success there? If so, what have they done to hit their crowdfunding goals? Once you’ve found the site you want to use, look at successful campaigns for clues that might help you build your own.
Don’t be afraid to look at businesses that have nothing to do with the entertainment industry, too. There are lots of good ideas out there. Remember, there’s more to raising money on a crowdfunding platform than simply creating a profile and hoping for the best. You want to get your audience excited and motivated to become a part of your success.
2. Dial In Your Offer
If you’re thinking about the donation- or gift-based crowdfunding model, have you determined what you’re going to offer your supporters? Is it an exclusive branded T-shirt or maybe a performance giveaway? Even though crowdfunding isn’t a loan, that doesn’t mean it’s necessarily free money. Even if your offer isn’t enough to sway those who aren’t interested, it will encourage people who are sitting on the fence to support you.
Whatever you offer, make sure you deliver to your supporters first. You’ll lose their trust if they feel like you cheated them out of something you promised. And you can’t afford to make detractors out of your fans and potential fans.
+ Learn more on Soundfly: Get all the best practices and strategies for running a successful crowdfunding campaign, plus mentor support from former Kickstarter staff, in our course Crowdfunding for Musicians. Use code MSTAGE17 for 15% off!
3. Be Prepared to Invest in Your Crowdfunding Campaign
You may not have a polished or professional video of your performance, but that doesn’t mean it’s not enough to excite the crowdfunding community. Simple, amateur videos are still a great way to introduce your talents to the people you’re courting for cash. In addition to raising money, you’re also building a fanbase, so ask yourself what you’d like to see from someone asking you for money.
4. Remember: Nobody Likes to be the First Person at a Cocktail Party.
In that same way, nobody likes to be the first to invest in a crowdfunding campaign. Most successful crowdfunders get their personal networks involved before the campaign is launched so new visitors see some momentum and get excited about it, too. If you don’t feel comfortable reaching out to your friends and family to support your crowdfunding campaign, it might not be the best way to raise money. Personal connections are a critical part of crowdfunding success.
5. Set Realistic Goals
Keep in mind, most platforms take a percentage of the income you raise. Kickstarter, for example, takes 5 percent. What’s more, make sure your goals are realistic and attainable. Although you’ll be able to keep anything over and above the goal you achieve, if you don’t reach your goal, you won’t get to keep anything you’ve raised. In other words, it’s typically an all-or-nothing proposition, so make realistic goals.
The crowd doesn’t really care about how long you’ve been performing or what your credit profile looks like. They’re more interested in what you can do and being a part of something that has the potential to grow big. This makes crowdfunding a potentially good source of capital for an entertainer just starting out, provided you can build a following and inspire them to invest in your talent.
If you’ve had experience crowdfunding, please share your comments below. I’d love to hear what worked for you — and what didn’t.
Learn more about crowdfunding and get personalized feedback on your campaign from a Mainstage mentor when you sign up for Crowdfunding for Musicians. Mainstage mentors do whatever it takes to help you meet your goals, through close communication, feedback on your work, and insider tips. And because you’re a supporting member of the Flypaper community, we’d like to offer you 15% off of this course with discount code: MSTAGE17.
Ty Kiisel is a contributing author focusing on small business financing at OnDeck, a technology company solving small business’s biggest challenge: access to capital. With over 25 years of experience in the trenches of small business, Ty shares personal experiences and valuable tips to help small business owners become more financially responsible. OnDeck can also be found on Facebook and Twitter.