As the Artfacts initiative of the Australia Council has noted crowdfunding has emerged as a new source of funding for the arts. Globally, crowdfunding platforms have seen dramatic increases in funding raised with $2.7 billion raised in 2012 (up from 1.5 billion in 2011) across all categories (including arts). Kickstarter, one of the key global crowdfunding platforms, has successfully funded over 20,000 arts-related projects, which raised over $100 million in support.
Pozible, an Australian crowdfunding platform, had an average success rate of 56 percent in 2012, up from 45 percent in 2011. As of February 2013, the platform has helped funnel a total of AUD$8 million across 1,300 successful projects since it was established in May 2010. While this funding was across all categories, some of the most popular categories have been film, performance, art and music. http://www.pozible.com Check out projects that have been successful on this site and if possible talk to artists who have used it.
However it is not the answer for everyone. “If you’ve ever been to a big, rowdy concert, you’ve probably witnessed the phenomenon of crowdsurfing. This happens when a musician or fan takes a leap of faith from stage, knowing the crowd will carry them to safety. Using crowdfunding for your startup venture is much like crowdsurfing a rock concert — and also carries the same hazards that, at any moment, someone might drop you to the ground.” This nextweb.com blog offered some other matters to consider when it considered Kickstart against more traditional investment and these may also apply to other sources of arts funding.
Rushing to market. Starting up a Kickstarter campaign instantly puts a ticking clock above your head when it comes to delivering your product or service. Not everyone has the Hollywood contacts of Zach Braff, and trying to develop your business with a list of Kickstarter backers following your every move can be more stressful than comforting.
Traditional investors and funders. One of the biggest benefits of traditional investors is located in their brains, not in their wallets. Sure you can raise your seed money on Kickstarter or another crowdfunding platform… then what? Many newbie startup founders and first time entrepreneurs need the guiding hand of an investor who has been where they are and can help avoid the pitfalls. Your crowdfunding backers are looking for a finished product, they’re not going to provide you the means to make your dreams a reality.
What happens if you fail. On Kickstarter, you can promise products and rewards for backers who pony up cash to make your big dreams into a reality. But what if your company crashes and burns? Not only did you lose out on your entrepreneurial dreams, you still have Kickstarter rewards to honor.