Could Your Small Business Use a Kickstart?

Kickstarter.com is an innovative way to find funding for small business.  The site, created to aid artists, has been pegged by emerging, expanding, and struggling small businesses as a creative way to communicate project ideas to potential investors.

The concept is easy.  Small businesses create an online profile explaining their project and setting a minimum total needed to fund the project.  Then, it is open to the web-surfing public to "pledge" for the project. 

The incentive for funders?  Project creators can establish creative incentives for pledges including services, invitations to events, exclusive updates. 

The creative catch?  Small businesses have to identify an expiration date for their project on Kickstarter.com.  If the pledges do not meet the minimum funding requested, then no pledges are collected.  On the balance, if the pledges reach the minimum, or surpass it, the funding is facilitated by Amazon.com.

If you are like us, you are intrigued.  But what kinds of projects have been funded through Kickstarter?  Here is a sampling:

• Small business owner Matt Lunsford from Illinois created a page for his company Polyvinyl Records, an independent record label, that found itself in the unique predicament of needing to downsize its inventory to the tune of 10,000 records.  Where storage wasn't an option due to cost, the company decided to use Kickstarter.com to post the project and incentivize pledges by promising to send funders a combination of cd's and dvd's from their collection based on the pledge amount.  Was it successful? The project received of $15,500 in pledges, making it 1553% funded.
  

• New Yorker Joseph Wain's project was funded 360%, giving him seed money to develop icons for iPhone developers.  Aiming for pledges worth $500, in exchange for release of his set of icons for use in applications and merchandise, the online funding request left him with $1800 in his pocket.
  

• Another project was started by Emmy-nominated director Joe Beshenkovsky and producer Jason Bitner who sought funding to create a documentary about the lives of on a number of townspeople from the city of LaPorte, Indiana who were the subjects of of studio portraits taken over three decades.  The incentives included one of the original portraits all the way to a guided 2-day tour of LaPorte.  Funded 162%, the project received over $12,000 to get kickstarted.

Creativity and innovation have always been characteristics of small business success, so it may not be surprising that a website has found a way to harness both, by employing both.

 

Related Resources:

• Kickstarter.com
• Legal Aspects of Starting a Business (provided by Dunn Lambert LLC)
• Business Organizations Resources (provided by Soden & Steinberger LLP)