The Future of Crowd Funding - Steve Rosenbaum - MediaBizBloggers

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Published: January 28, 2010 at 03:31 AM GMT
Last Updated: January 27, 2010 at 03:31 AM GMT

By Steve Rosenbaum

Have you ever had an idea that you just KNEW would be a hit if you could just raise some money to get started?

Chances are you have, and odds are that unless you had a rich uncle, you didn't raise any cash. The history of Venture investing is based on funds and individuals looking to back big ideas with money that can show big returns. The key word here is big.

So, what if your idea is great, powerful, artistic, even awesome -- but just not conceived as being a big cash cow? Well, before the Web you would have been out of luck.

Today there's a new way, a Web-based way, to find funding. And it's fast becoming the solution of choice for filmmakers, artists, teachers, Web site creators and others.

It's called Crowd Funding and it's a new way to raise money from lots of individual funders who are aggregated by the Web.

Here's a great example: Indie GoGo

Indie GoGo describes itself as a "collaborative way to fund ideas and fuel innovation." Filmmakers post their ideas, clips and pitches on Indie GoGo and ask the community to commit cash. They can offer little perks for contributions, such as T-shirts or parties or film credits.

"Crowdfunding is a new and exciting channel for funding," says Danae Ringelmann, Indie GoGo's founder, "Because it involves your audience from the beginning and allows you to build a fan base throughout the production of your film."

The site claims that it's already raised $200,000 for filmmakers, and has 10,000 members and 2,300 projects. The site features films, causes and music. Each project outlines what they need to raise, and where the money will go if raised. For example, for a film called "Here Died All The Cardinals," $50 gets you a credit and a party invite. $100 gets a larger film credit. $2,500 gets you a credit at the top of the film and an Executive Producer credit. So far, they've raised $700 of a $7,500 budget.

But crowd funding isn't just for filmmakers - and the site Kick Starter is proof of that.

For Kick Starter, there's wide range of projects looking for your support. There are authors looking for cash to finish their books, groups like Hackerspace in Brooklyn that's moving to a new space and is looking for cash to help get gear and the move covered. They set a $2,000 goal and have so far raised $2,035 (102% of goal).

Categories like theater, community, comics, design, animation and journalism all have compelling projects and growing funding to support their ideas. Part of what makes Kick Starter interesting -- you pledge what you can to a project, but your credit card isn't charged until the goal is met, so you don't have to worry about a potential project getting your hard-earned dollars before they've reached critical mass.

And finally, if you're looking for a single source of a bunch of cash, there is the aptly titled Awesome Foundation. The Awesome Foundation began in Boston with a simple idea, a small group of donors (micro-trustees) could commit a monthly donation and then invite folks to submit awesome proposals. The idea caught on, as you can see from checking out the awesomeness on their blog. Now the Awesome Foundation is spreading, with chapters in Rhode Island and a newly announced chapter in New York.

I've always believed that the current methods of funding the arts, film and other creative and scientific endeavors tend to bias the process toward large, commercial, profit-oriented projects. Not that that's a bad thing, it's just that it shouldn't be the ONLY thing. If there's a public art project, or a documentary film idea, or a bit of exploration - then those ideas should be able to find patrons and get micro-funding.

So, I've decided to put my micro-funding where my mouth is, and I've signed up to be one of the founding micro-trustees of the New York Chapter of the Awesome Foundation. We meet monthly, review projects for what we've broadly defined as "awesomeness," and then we make a monthly grant of one thousand dollars. Cash. It's a meaningful amount of funding for an idea with a defined goal and a clear objective. And the thing is -- having now been to two meetings -- it feels really good to be able to help make things happen.

No matter how you cut it, Crowd Funding is here, and it's going to grow fast. As individuals begin to discover that they can have a real impact with their limited cash and know that they're part of a movement to make creative work possible, then I'd guess that you'll see more and more Crowd Fund projects come online in the next few years.

Crowd Funding: It's a powerful and meaningful way for individuals to influence projects and topics that matter to them.

You've gotta love that.

Steven Rosenbaum is the CEO and Co-Founder of Magnify.net - a fast-growing video publishing platform that powers more than 50,000 web sites, media companies, and content entrepreneurs to aggregate and curate web video from a wide variety of web sources. Currently Magnify.net publishes over 50,000 channels of Curated-Consumer Video, and is working closely with a wide variety of media makers, communities, and publishers in evolving their content offerings to include content created by, sorted and reviewed by community members. Rosenbaum is a serial entrepreneur, Emmy Award winning documentary filmmaker, and well known innovator in the field of user-generated media production. Rosenbaum Directed and Executive Produced the critically acclaimed 7 Days In September, and his MTV Series Unfiltered is widely regarded as the first commercial use of Consumer Generated Video in US mass media. Steve can be contacted at steve@magnify.net Follow Steve Rosenbaum on Twitter: www.twitter.com/magnify

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