No money, no problem: Crowd funding helps launch Iowa Corridor projects
Kickstarter.com has helped launch more than 100 projects in Iowa
Alexander Steele still has no idea who gave him $2,000 to help launch his business of hand-crafting guitars and ukuleles.
Using the website Kickstarter.com, Steele needed only a month to raise $15,000. That was enough for him to quit his job so he could build guitars full-time in his basement in Cedar Rapids.
According to Kickstarter’s website, more than $560 million has been pledged to fund more than 39,000 creative projects since the site became functional in 2009, including more than 100 projects in Iowa.
Kickstarter is the most well-known platform for crowd funding, as it’s called. But more than a dozen websites exist for various kinds of projects, including those of students, musicians and clothing designers.
The money pledged isn’t a donation – most of the sites are set up so financiers get rewards depending on how much they pledge.
Money only changes hands on Kickstarter if the fundraising goal is reached within the specified amount of time. There is no cost to get started, but if the project is fully funded Kickstarter charges a 5 percent fee, and there is an additional 3 to 5 percent fee for credit-card processing.
Steele said a friend suggested he try the site. He set his goal at $15,000 because it would allow him to focus on building guitars full-time for at least six months.
“I just decided to go for it because there’s really nothing to lose because it doesn’t cost anything unless it’s funded,” Steele said.
Steele’s project page includes a video describing his story and explains how he would spend the money. Within the last five minutes of funding on Dec. 16, Steele met his goal.
Of the 37 backers, about 10 of them were strangers.
One of the unknown donors gave $2,000 in exchange for a guitar made of Hawaiian-grown koa wood. Another participant gave $500 for a guitar made of myrtle and spruce wood.
“For a handmade guitar, that’s pretty cheap,” Steele said. “The prices were super reasonable so I felt like, going into it, maybe people would go for that.”
Jonah Greenstein, who grew up in Mount Vernon, is using Kickstarter to fund his thesis movie at New York University. “Watertower” is set in his hometown, and weaves together four storylines.
He surpassed his $6,000 goal by its April 19 deadlines.
“It’s been a nice mix,” Greenstein said of his contributors. “Some of them are family members and some are members of the Mount Vernon community that I either knew through school, or family friends, or people interested in the arts,” Greenstein said. “On top of that, there are some strangers.”
Greenstein plans to use the money to bring 12 of his classmates to Mount Vernon for a two-week production period. Additional funds will be spent on set design and costumes and for distribution of the completed film.
Several of Greenstein’s NYU classmates have used Kickstarter for various projects. He said crowd-funding is very popular with film makers, musicians and others involved in the arts.
“It’s a pretty common thing out here,” Greenstein said.
Both Steele and Greenstein said the online platform was easy to use, and even if the project isn’t funded, it still gets free publicity. A page describing Steele’s project – and now his emerging business – is still on the Kickstarter site nearly four months later.
“You’re getting the word out there about your project,” Greenstein said. “You never know who might be interested, and I think that’s a really positive aspect of crowd-funding.”
Project goals range from only a few dollars to millions. Earlier this month, a project to produce a movie based on the television series “Veronica Mars” set a new record with $5.7 million pledged. And some $4.18 million was pledged toward a project to design a video game called “Torment: Tides of Numenera.”
Steele will be using his money to order the wood and parts to make his handmade guitars. He admitted it was exciting to reach his goal but also overwhelming — he now had 19 guitars and ukuleles to build and deliver to his financiers, and each one takes about four weeks to make.
Although it’s early, Steele thinks crowd funding might have helped him make a permanent career change.
“I think it’s going in the right direction,” Steele said. “Even though the project has ended, I still get people sending me messages through Kickstarter that they are interested."
SEE THE PROJECTS:http://www.kickstarter.com/projects/jmgreenstein/w-a-t-e-r-t-o-w-e-r