With the seconds ticking down on the clock, Emily Harrison types in $4,098 when prompted to enter a contribution amount on the webpage that’s open on her computer. Entering in her credit card information, Harrison completes her donation to the Square Product Theatre in Boulder. With that click of a button, the theater surpassed its $10,000 fundraising goal on Indiegogo, a crowdfunding website.
Harrison , producing artistic director of the Square Project Theatre, is forced to front the amount that was not fundraised to avoid a 5% higher fee from Indiegogo.
"We also know that those smaller donation amounts can add up,” Harrison said about crowdfunding, “and that everyone can truly have an impact.”
Indiegogo, along with Kickstarter are two of the largest crowdfunding websites.
As of Thursday, 43.91% of projects on Kickstarter had reached their funding goals, according to the statistics page, but there’s no indication of how many met that goal through self-funding, like Harrison had to do. Indiegogo declined to answer questions regarding projects success rate on their website, due to time constraints.
Harrison is one of many Boulderites who has turned to crowdfunding online for their projects and business ideas. Crowdfunding is when people give money online to an individual or organization, often in exchange for a reward ranging from products to tickets to hand written cards.
While under half of all projects on Kickstarter are fully funded, those that are still face many problems during and after fundraising. Boulder crowdfunded campaigns are not immune to these problems.
PopSockets, which was invented by David Barnett, a University of Colorado Boulder philosophy professor, is “an iPhone case with expanding buttons for propping, gaming, holstering, headset management,” according to its Kickstarter page.
Barnett’s campaign was successfully funded in February 2012, raising more than 150% of his fundraising goal. Barnett attributes his success to a video of himself dancing in a library. He said he wanted to use an original video idea to gain media attention, which worked, receiving worldwide emails in a matter of days.
But for Barnett, the end of Kickstarter campaign meant the start of some very real problems.
After spending close to a third of the funding on research and development, Barnett faced problems with the design and production of the project. He said that at this point he realized the fundraised amount was minimal compared to the project size.
After pursuing the production on his own, Barnett had several Chinese manufacturing companies give up on his products after many months and prototype attempts. Only recently he began working with what he calls the best factory in China.
Barnett still faces many more steps before PopSockets ship. He has also offered refunds to backers at every delay, with almost 30% of original backers taking advantage of this. Giving refunds to backers takes money away from the company and might already be spent.
Seamus James and his friend Brett Wagner, CU Boulder alumni have known about Kickstarter and crowdfunding for years and had interest in doing a campaign themselves. While looking at other successful campaigns, they came up with the idea to make a formal King’s Cup deck of cards.
King’s Cup is a drinking game played with a deck of playing cards. In James’ research, the rules for the game often vary, along with being limited by the cards in the deck. Their idea solved this problem.
The cards were sold for $7, cheap enough for the targeted audience of college students to afford and enough to to buy extra decks for future sales. James said that this would create a self-sustaining King’s Cup business.
James ran his Kickstarter campaign this July. While the campaign gained backers slowly over the allowed time, it did not reach full funding until the second to last day.
“Launching a product that targets college kids in the middle of the summer worked to our detriment,” said James, “because students weren’t watching their emails as closely.”
James’ campaign struggled due to the project’s timing and Boulder’s demographics, while David Barnett’s and Emily Harrison’s campaigns were directly impacted by nature.
Barnett lost his home in the 2010 Fourmile Canyon fire and then used his house insurance money to help pay for the original case design, allowing for development and prototypes before his Kickstarter campaign.
Harrison’s campaign was on track to be fully funded, until the September Boulder flooding brought funding from the Front Range to a halt. People became focused on rebuilding and repairing their own homes and communities.
“I think that people should have been focused on relief efforts,” Harrison said, “so it’s tough because it doesn’t mean that we suddenly don’t need that funding.”
These unforeseen events make or break a crowdfunding campaign. Although reaching funding is just a “drop in the bucket,” said Barnett, it is a vital part of the process.
PopSockets are still facing production delays and design issues 20 months after the Kickstarter campaign. King’s Cup cards are several weeks behind schedule, but should be shipping by the end of October. The Square Project Theatre is still short thousands of dollars for this season’sshows, unsure of how to raising the remaining funds.
These many setbacks have not been a deterrent for crowdfunding. The exposure and market reach of crowdfunding websites made the campaign worth it in itself James explained. Even with delays, a majority of customers remain excited to receive their product in the end.
“The only downside has been the responsibility to the Kickstarter backers,” said Barnett.
Crowdfunding often encounters delays Barnett said, while backers can be enthusiastic at the beginning of a project, they can grow weary after multiple delays.