CROWDFUNDING: HOW THIS NEW AND SOCIAL FUNDING SECTOR STACKSUP, KICKSTARTER, INDIEGOGO AND MYMAJORCOMPANY AT THE TOP

 

Creatives and inventors don’t need a record label, a movie studio or a wealthy uncle any longer - now, community websites let fans be benefactors. But how do these platforms stack up? We spoke with each of the main crowdfunding sites. Here’s what they did - and didn’t - tell us…

Site	Start	#Projs	Projs Finan	Projs Realised	#Donors	Pledged	Paid	Avg Pledge	Site's                               Comm
Kickstarter	Apr 09	12,000	5,000+	3,5K-4.K	400,000+	$35m+	-	$71	5% of payout
IndieGoGo	Jan 08	15,000+	4,000+	Thous	-	-	Millions	$79	4%/payout             (9%ofpledges)
SellABand	Aug 06	-	54	38 CDs	-	-	€2.7m	€41	15% of payout
RocketHub	Feb 10	350	75	-	-	$400k	€300k	-	8% of payout
ULuLe	Oct 10	169	53	80%	4,818	€100k	€70k	€32	0% for now
SliceThePie	Jun 07	-	31	26 albums	-	-	€750k	-	-
Pozible	May 10	-	29	-	-	-	-	-	7.5% of payout
PledgeMusic	Oct 09	-	77%	110	-	-	-	-	15% of payout
FeedTheMuse	May 09	-	-	-	-	-	-	-	-
ArtistShare	-	-	-	-	-	-	-	-	-
SonicAngel	Apr 10	1,500	13	12	3,500	-	-	€46	0% (shares in returns)
MyMajorCom	Dec 07	18,000	36	15	30,000	€5m	€360k	€150	0% (shares in returns)

Research conducted December 2010 to February 2011, including interviews with crowdfunding sites.

COMMENTARY:  Crowdfunding sites Kickstarter and IndieGoGo are the market leaders in the U.S. by wide margin.  Both cater to creative type's (artists, film producers, writers, musicians, inventors, etc.).  I highly recommend Kickstarter.  IndieGoGo claims to be "the world's leading international funding platform".  I just checked the site and they have 18,000+ listings.   One memorable project that received a lot of buzz, and which I profiled on my blog was about inventor Scott Wilson, the designer of a kit to convert the Apple iPod Nano Touch into a watch.  When I wrote the article it had raised $275,000 from 3,765 donors.  When I last looked about three weeks ago they had raised $900,000+.  That's impressive.

In another blog post dated December 19, 2010 titled, "Should Investor's Pay To Pitch Angel Investors? Absolutely Not, And Here's Why", I was very critical of the process of holding "pitch" events where entrepreneurs pay pitch fees of several hundred to over a thousand just to have an opportunity to pitch an angel investor.  That's bullshit.  I pointed out that crowdfunding could be a great alternative to these pitch events, and if angels are not too careful, could replace them as a seed funding source.  That blog post contains links for other crowdfunding sites, which may be of interest to you.  

MyMajorCompany is the market leader in the U.K., and caters to music artists or bands seeking funding to jumpstart a new album, band or music event.  Very cool site.  Glad I found out about it.

Courtesy of an article appearing in PaidContent.org