Owen Masterson and Christine Anthony are the husband and wife filmmaker/photography team known as Anthony-Masterson. Moving from Los Angeles to Atlanta five years ago, they learned two lessons very quickly. First, locating a farmers market wasn’t very easy in 2005 Atlanta. Second, filmmaking costs money. While the duo knew they could use film to generate awareness of the sustainable and organic growers around the area, they needed to identify a method of securing post-production funding for their second film, Grow!, that was as creative as they are. Anthony-Masterson turned to Kickstarter. The filmmakers walked the red carpet of their movie premier after 62 backers from the Kickstarter group helped them surpass their $10,000 project goal. Entrepreneurs like Masterson and Anthony are increasingly turning to creative funding strategies such as micropatronage and crowdfunding to get their company off the ground.
Kickstarter is a funding platform for creative projects that moves beyond traditional lending or investment. Started in 2009, the crowd-funding site now raises $1 million each week in pledges and boasts $35 million pledged overall. In two short years, Kickstarter has helped 5,000 projects receive funding, and almost 300 new proposals come in daily.
The IndieGoGo platform was originally developed to help filmmakers fund their projects, however, according to the company website, whether you are a rollerskater or a treehugger, fashion designer or engineer, their platform is open for your funding campaign. Using the concept of DIWO (Do it With Others), the entrepreneur uses integrated social media tools to pitch their idea. Filmmaker Jenalia Moreno with partner Nancy Sarnoff had a successful campaign on Kickstarter and tried their hand at IndieGoGo to raise funds for their documentary Stitched. Moreno offers a few tips for succeeding at crowdfunding, “You have to have your tentacles everywhere.” Moreno advises; ask for a realistic amount of money; get your trailer out there; and offer cool gifts.
Creative projects are often the most challenged when looking for funding. Entrepreneurs in creative media require monies for ideas that have a specific start and end, rather than an ongoing business. A short film or photo essay may not offer the appeal of part ownership and profitable returns on investment. Emphas.is addresses this problem by crowd-funding visual journalism. Professional photojournalists submit story proposals, and then a board of expert advisors review their prior work and estimate their ability to acheive the project goals set out. Individuals can contribute towards work that highlights issues and themes they support with contributions as small as $10.
MassChallenge is the world’s largest startup competition. In 2010, the company supported 111 entrepreneurs, created 300 jobs and raised $30 million in funding. MassChallenge is an independent nonprofit company praised by President Obama for its innovation and commitment to economic development. The White House even named the company as a partner in the Startup America Partnership. MassChallenge stands out among creative funding programs because they take none of the entrepreneur's equity, but still provide every entrant with access to mentors, workshops and new sources of funding.
There are other entries to the world of creative financing; newcomer Ulule differentiates itself by only working with projects that are in the interest of the social good or community. ProFounder, the brainchild of Stanford Business School alum Dana Mauriello and Kiva co-founder Jessica Jackley, offers a chance for unaccredited investors to participate in building new businesses without worry of moving outside of legal compliance. Entrepreneurs can set their own investment terms and ProFounder handles all of the compliance issues.
Finding funding and investment for innovative technologies, creative arts or untested theories is often the stumbling block for entrepreneurs. Peter Thiel, Paypal co-founder, discussed this difficulty in this way, “Start-ups are tremendous drivers of economic growth, yet the basic mechanics of investing in new companies can be difficult and inefficient…” Amid an unstable economic and investment climate, new crowd-funding platforms have launched million dollar projects, changing the way business begins. Creative funding platforms, built for entrepreneurs by entrepreneurs, are uniquely positioned to disrupt the way entrepreneurs approach fundraising for years to come.