This article was contributed by Polly Letofsky.
Here’s the hard truth—up until just a few years ago big publishing companies had full control over the content that got out into the world by saying yes or no to writers and their works. They also had full control over the presses and all the distribution channels. The revolution of publishing means that as writers we can now get any content we want into the world, with full access to printers and distributors. And the last hurdle is now being tackled—financing.
Crowdfunding is the concept of an individual reaching a financial goal by receiving and leveraging small contributions from many parties. For a writer, it’s a great new way to fund your book without going into credit card debt or asking your parents for the capital.
Crowdfunding has been around in some shape or form since God was a boy, but the inception of modern day crowdfunding came in 1997 when a British rock band funded their reunion tour through donations from fans. Shortly thereafter, more crowdfunding plat- forms began to emerge, and the crowdfunding industry has grown consistently each year.
When the economy took a plunge in late 2008, banks stopped handing out loans, Small Business Association loans were few, and other finance options became significantly downsized. That’s when crowdfunding emerged as a major funding source and has sky- rocketed from a $530 million industry in 2009 to upwards of 5 billion in 2014.
There are a number of benefits to crowdfunding outside just raising the capital to publish your book. One of those benefits is that this is a great way to essentially pre-sell your book. Another benefit is to create a buzz. But please don’t think for a minute that it’s going to be easy. This is a campaign, and like any campaign you need to create a plan, implement, and follow up, follow up, follow up.
While most people do these campaigns by themselves, there have recently been companies popping up that will create the campaigns for you. But even with their help, it’s nothing you can entirely hand off to someone else. A crowdfunding campaign is about connecting with your people: friends, family, neighbors, and colleagues. Very few crowd- funding campaigns actually go viral and make a connection with people outside their circle. In fact, 20% of campaigns don’t earn anything. So hiring a company will only guide you, but it is still up to you to make your campaign successful.
To drive home that point, most campaigns are made up of 98% of people in your circle. In other words, only 2% of people that donate are people you don’t know. They might be friends of friends who bond with your project, or a pledger may have found you simply trolling through the crowdfunding site.
There are four main types of crowdfunding: donation, rewards, equity, and debt. Raising capital for book publishing is reward crowdfunding. That is to say, people give money in exchange for a promised reward.
Kickstarter is the most well-known platform and concentrates on more art-related projects: art, music, film, dance, books, etc. With Kickstarter your campaign has to be creating something: a book, a CD, a dance video, etc. You can’t raise funds for marketing because marketing is not creating something. You should also know that Kickstarter has a selection process with a whopping 40% of projects being turned down.
With an Indiegogo campaign you can raise capital for anything: arts, business, even a non-profit. Pubslush is a niche community dedicated to the literary world by allowing only literacy-based projects. They also offer terrific campaign support from their free Basic Support Package to the Platinum Prep for $250. A benefit to using Pubslush or Indigogo is that they do allow campaign funds to go toward marketing, PR, registration, and other elements of a project that aren’t creating something.
Crowdfunding platforms offer two types of campaigns: fixed or flexible. Kickstarter only offers “fixed” campaigns, which means that you set an amount that you want to raise and if you don’t raise that amount you don’t get to collect anything that has been pledged. In exchange for that, though, you pay a lesser percentage fee than with “flexible” campaigns.
A “flexible” campaign means you set your desired goal and you get whatever has been pledged, whether you’ve met that goal or not. If you raise your intended amount, you pay only a 4% service fee—if you don’t raise the intended amount you pay 9%—so, you can see the incentive to campaign heavily to reach your goals. (NOTE: Obviously these numbers are subject to change, so always check before you dive into a campaign.)
The bad news is that 60% of campaigns don’t reach their intended amount. The great news is that publishing campaigns have a 30% higher rate of success than other campaigns. Here are other tips, hints, and stats we know:
- Campaigns with a video are 60% more likely to get funded. It’s your main sales tool, so make it compelling. You want to explain succinctly what the money will be used for, but not in a “salesy,” infomercial way.
- Your video should be under two minutes.
- While most platforms allow up to a 60-day campaign, those from 30-34 days are the most successful.
- Be conservative with your goal. A common misconception is that people will stop giving if you’ve hit you’re goal. It’s not true. People like to be part of something exciting.
- If you hit 30% of your goal in the first two weeks, your chances of success is 85%.
So make the hard push at the beginning and follow through.
- 10% of those you reach out to will give to the campaign.
- Your pledgers should hear from you every couple of days throughout the campaign. You do this to keep them interested, up to date, and to create the buzz.
- Regarding timing, summer is a tough time to do the project, with so many people vacationing at that time of year. Fall and early spring are preferable. Never host a campaign over a holiday season.
The rewards in your campaign are what your pledgers receive from you in return for a stated amount. It’s best to have between five and seven rewards that might vary from a $5 reward for a public thank you on your website up to a $1,500 reward for naming a character, town, or street after them in your book. You want the larger rewards to be unique and experiential. For example, for a $500 reward you could offer lunch with the author. If it’s a memoir, you could offer lunch with a number of people who are mentioned in the book.
Other good ideas for rewards could be an author appearance at their book club, a speaking engagement, an ad on your website or at the end of the book. To gather ideas for rewards, it’s a great idea to troll through some of the campaigns with books and genres similar to your own and see what has been successful. If anything, it will get your creative juices flowing.
Best practices for rewards are:
- Offer five to seven rewards
- $25 is the most popular reward
- $25 should be the least amount donated to receive a reward of your book
- $100 is where you’ll make the most money
- Make two of your rewards experiential. People like something unique. The zanier the better.
- When you’re creating your rewards don’t forget the cost of postage, packing, service fees, payment fees, etc.
In summary, a crowdfunding campaign is a brilliant new way to finance your book project. But please don’t take it lightly; it’s a full-time commitment if you are going to be successful. Good luck. And congratulations for stepping into the world of publishing at the most exciting time in history.