Monday, June 3, 2013

Kicked Before Starting..? The New Middleman

It has gone by many names: Crowdsourcing, Crowdfunding, 'Angel Financing', and Group Backing. Since KICKSTARTER opened it's doors in 2009, the digital middleman company has changed the landscape in regards to how independent projects are financed without the need for large corporations; bringing many a great idea to fruitition. The initial design of the network was aimed towards those artists, filmmakers, and creators who needed help to realize their projected goals, with Kickstarter acting as the middleman...  It seems to still be the case, though it's with the arrival of more noted professionals and other legal hurdles flooding the Kickstarter network that has given cause for concern for those who are still campaigning to make said dreams real... Welcome to PLANET GRIFFIN.
Let's look at the statistics:

  • MARC SILVESTRI, creator of the much lauded CYBER FORCE comic, which helped change the comics game in the 1990's with IMAGE comics, successfully campaigned it's resurrection in 2012 by raising $117,135 for the series (exceeding goal by an additional $42,000).
  • ROB LIEFELD, another IMAGE comics founder, is currently campaigning the return of the BRIGADE comic; raising over $6,775 in less than 24 hours, hoping to secure a pledge goal of $17,500. Liefeld's aim is to release the first issue for free.
  • ROB THOMAS successfully campaigned the return of former TV series VERONICA MARS, raising a whopping $5.7 million dollars, exceeding it's original goal by $3.7 million.
  • Actor ZACH BRAFF's latest in-production WISH I WAS HERE just closed at $3.1 million.
  • MAC BISHOP, 24 yr. old entreperneur, raised over $300,000 for wearing what he claimed to be a wool shirt that needed no wash/dry cleaning for 150 wears. (His father is the CEO giant of Pendleton Woolen Mills.)
  • Singer/Songwriter AMANDA PALMER recently completed a Kickstarter campaign; consisting of an album, art book, and tour. A $100,000 goal ballooned into $1.1 million.(Palmer is also the wife of legendary comics writer Neil Gaiman.)
  • ERIC MIGICOVSKY, creator of the smartphone-connected Pebble, closed out his campaign with an astounding $10.2 million for a customizable digital watch.

The internet has been abuzz over the last 2 months, debating the fairness of famous people using Kickstarter to fund their projects. Some people believe headline names act as 'rainmakers' for crowdfunding in general, helping draw more attention to projects. Others believe it's a drawback for those newcomers who have incredible project pitches, but fall short due to lack of marketing, whether through press coverage or other social media outlets. There are countless statistics online that suggests those aforementioned famous people actually help smaller projects with their notoriety.
Now, of course there will be plenty of statistics that support the idea of famous people pitching projects to Kickstarter--- and why not?!  Kickstarter collects 5% automatically from each successful campaign. (Imagine 5% from each of the notable stats mentioned above, atop the thousands of campaign pitches that arrive weekly into the Kickstarter offices! With the exception of Silvestri, the other campaigns shown are within the last 3 months ALONE). Also, the very fact that this same famous collective already has access to resources to suit their project needs as opposed to minor upstarts who go through Kickstarter to create the given resources needed is unsettling.

It's no different than begging on the street for gas money to a Ferrari at home that you barely drive! The people pay to have the product made and, in the majority of the campaigns, pay again to obtain the very product they seek. Twice bitten, twice shy.

Now, given that the crowdsourcing giant, with it's loose wording of 'taxable income', the IRS has now instituted new tax codes regarding funding rewarded from successful Kickstarter campaigns as fully taxable income (As of April 1st of this year--- who's the fool?). Tread very carefully when offering startup rewards. Kickstarter fees, minus expenses, could easily turn into tax audits.

Now, none of this is to discourage anyone from launching campaigns on Kickstarter, as the projects that have come from these campaigns have been great... This is merely an opportunity to better introduce you to the new middleman you will face when you prepare your next great idea. Hurry. The masses are waiting...

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