I know that I love to share best practices and success stories, but sometimes you learn more from your failures. And that is what inspired my latest article for Main Street Now, all about my fantastically terrifying journey into the mystical land of crowdfunding. A few people had trouble accessing the electronic file that I shared via The Downtown Geek, so I decided to repost it here. It's a bit longer than my usual blog, but absolutely worth the read! Enjoy!
How NOT To Run A
Crowdfunding Campaign
Okay, maybe that’s a little harsh.
At the end of the day, our crowfunding
campaign was successful so I guess it wasn’t all that bad.
As with most epic stories, it is always best
to start at the beginning.
Last year, when we received our bids for our annual holiday
lighting event, The Big, Bright Light Show, we were stunned and bewildered when
the lowest bid was 2 5% higher than the previous year. Did I mention it was the end of August and
installation begins October 1? There was
absolutely nowhere in the budget to find the extra money that we needed. We didn’t have time to reissue the RFP and we
couldn’t postpone the installation date because they need every day possible to
install the 1.5 million lights, so we were in a quandary.
We seemed to have two options – downsize the show or find
the money somewhere else. I couldn’t
even stomach the idea of going to our business owners on Fourth Street and
telling them that, through no fault of their own, they were not going to have
lights this year. Since that was now off
the table, I was left with only one option – fundraising. We brainstormed for days trying to come up
with a winning idea. Merchandise sales,
big membership drive, additional sponsorship opportunities were all put on the
table, but we needed to raise $25,000 and we needed to do it fast. It became clear that there really was only
one viable option – crowdfunding.
I had done my research on crowdfunding a long time ago and
identified it as a definite possibility for us from a fundraising standpoint if
the right project came along to try it out.
It was never my intent to take our largest, most important event and use
it as a crowdfunding guinea pig. But the
days were ticking down and we were running out of time. And so it began…
First, we had to decide on the platform. In my research, I identified Indiegogo and
Kickstarter as our best options.
Kickstarter had the high profile brand recognition, so that’s the
direction we decided to pursue. As we started
to build our campaign, there were two key things that we needed to make our
campaign effective – exciting donation rewards and a compelling video.
So we started with the rewards. It became apparent rather quickly that
without a large quantity of cool rewards at various donation levels, it would
be over before we even got started. We
had some merchandise, but not the quantity or variety needed for this type of
campaign. We couldn’t afford to buy any
items to offer as rewards because that would be counter-productive and increase
the amount of money we would have to raise to offset the new expenses. So we went to the merchants to seek donations
– and they jumped on board immediately.
We had everything from gift certificates and jewelry to spa treatments
and music lessons. We were on our
way. Now all we needed was a cool video.
When we sent out the request for donations, we received a
call from a local videographer who saw our request and wanted to know if we
could use any video services? Ah yes,
things were falling into place nicely as we made a new friend at Third Street
Films and our video was ready to go. All
that was left now was to load everything up on Kickstarter for their approval. Simple, right? Not exactly.
The process of uploading everything to the site was very
user-friendly and was ready to go within a day.
So we pressed “Submit” button and we waited. And waited.
In their extensive guidelines, they did say that it would take up to a
week to get a response, so we weren’t too worried. About 3 days later, we finally received an
email from Kickstarter…at 3:30 am. I
discovered it when I got up the next morning.
They had concerns about how we chose our category “Art” for the project
and that we needed to provide an explanation before we would receive approval. Truth be told, there was absolutely nothing
else that fit us so that’s how we ended up in that category. But I really couldn’t tell them that, so
instead I spun a yard so wide and grand about the “historic buildings are our canvas
and the lights are our paintbrush…” (Yes, I know, I’m going to hell, but I
needed to raise some dollars and failure was not an option.) So I sent back my creative writing piece and
I waited.
And we received a response the next morning…at 2:30 am. Now they approved the category, but had a
problem with all of the “third-party rewards” because we cannot involve other
businesses that are not receiving a direct benefit from our campaign and all of
those would have to be removed if we wanted approval. Without those rewards, we were sunk. So I got out my creative writing cap once
again and explained, truthfully, what our organization does and that we are
representing all these businesses that would absolutely benefit from our
campaign. I challenged them that while
this was a bit out of their strike zone, Main Street communities are a huge
potential market for their services and wouldn’t it be great to use us a pilot
project to see what would happen. I hit
send and waited. And waited.
We waited for another three days. I resent the email, sent notes to the help
line. I would have called, but
Kickstarter doesn’t have a published phone number so that was super fun. Finally, we had to make the call, we were
planning on running the campaign for two weeks and we had to pull the trigger
now. So after all the time invested, we
made the switch to Indiegogo which we knew didn’t have the name recognition,
but you could pretty much create a campaign to send your gerbil to college and
they would approve it, so off we went and launched on Indiegogo. Almost exactly 8 hours after we launched, we
heard from Kickstarter. Ugh.
They loved the idea of using us a pilot program to test this
downtown market and gave us their blessing.
So now what?
We had raised about
$1,500 so far on Indiegogo but if we were considering making the switch, we had
to do it now.
Within about 20 minutes, I
knew what the right (yet painful) decision would be and I switched us over to
Kickstarter.
Now the real fun began.
And when I say fun, I mean my worst nightmare coming
true. Remember when I said that I didn’t
want to use The Big, Bright Light Show as the pilot for this type of campaign
because I knew it wasn’t a good fit. I
really hate it when I’m right. To
promote our campaign, we had to rely heavily on press coverage and social
media. On the press side, we had to
portray the fundraising in the most positive way possible because the last
thing we wanted to do was anything that would tarnish the reputation of the
show or Rochester. Social media was a
bit trickier since people can respond to you instantly. And oh, did they ever.
Within the first few hours on Kickstarter, I received some
of the meanest, nastiest, most accusatory comments ever. Many people were absolutely appalled that we
would dare to ask for donations for the lights when there were starving people
in the world. Okay, I get that there are
plenty of other worthy charities out there.
And we certainly weren’t suggesting that you stop supporting those
charities and instead give us your dollars.
So after some hard thinking and good cry in my car, I decided that we
couldn’t go back, we had to keep pushing because this was too important to our
businesses and our town. So we pressed
on.
Donations started to trickle in, slowly but surely. But it was easy to see early on that this was
going to be a long, painful road to success.
By the beginning of the second week, it was obvious that unless a
miracle happened, we were not going to be successful. On Tuesday, two miraculous things
happened. First, on a whim, we decided
to send out an updated press release and it got instant traction from key
television and radio stations in Detroit.
Secondly, we had an angel investor call and offer us $10,000. One catch – he didn’t want to put the money
down unless it would make us hit our goal.
Our campaign was ending on Friday at noon so we had to
hustle. We worked the press, we worked
our social media and by Friday morning, we were still $4,500 short of what we
needed to access the $10,000 offered by our angel investor. So while I sat in my Organization Committee
telling them that I was preparing for my first professional project failure,
something happened. We got a call from
our local utility company, DTE Energy, and they wanted to talk about the light
show. Needless to say, I walked out of
the meeting and got on the phone immediately.
The gentleman informed me that our County Executive heard about our
funding issue on the news and had called the CEO of DTE Energy and asked him to
help us. They were willing to give us
$5,000 right now.
After I pinched myself to make sure that I wasn’t dreaming,
I said thank you very much and proceeded to help him make their donation on
Kickstarter.
Without missing a beat, I
picked up the phone and called our angel investor to see if he was still
willing and able.
He was and so at 11:05
am, we officially were 100% funded.
Woohoo!
Was this the best project for crowdfunding? Probably not.
But did the end justify the means?
Yep. And there were plenty of
lessons learned along the way. At the
end of the day, crowdfunding is absolutely an exciting tool to use and is
destined to be a part of future downtown fundraising strategies, but make sure
that you know your options and really take time to evaluate your pitch before
you take the leap into the deep end of the pool called crowdfunding.
Kristi
The Downtown Geek
Yes, I just felt the collective eye roll from Main Street Managers far and wide, as many of them 
