This article was updated in 2016 in the post: Old School vs New School Crowdfunding: Which One Should Authors Consider? Please check that out.
It’s been called the no money, no problem solution in self-publishing, I’m of course talking about crowd funding. Crowd funding got its start in response to a very dark past, when self-publishing was much like gambling since it was unlikely an author would ever recoup their initial investment. In those primitive days, aspiring authors would charge all their publishing expenses on credit cards or withdraw from retirement accounts in order to make their dreams come true. Not understanding how publishing works, many indies watched their life savings depleted by expensive vanity publishing contracts and unscrupulous con artists.
Since we indie authors are running a business, why don’t we raise capital like a normal business? Just because some editor or agent says no, doesn’t mean a book should die. There are several online sites that industrious authors can use to fund their self-published projects like; Kickstarter, IndieGoGo, and RocketHub just to name a few.
The Dark Side of Crowd Funding
According to the rules of most popular crowd funding sites, there is 2-9% cut of all money raised. However the fees don’t end there, some banks and middle men like in the case of Kickstarter, (Amazon Payment) takes another 3-5% for credit card processing fees. Also, authors can’t forget the tax man because according to the U.S. Internal Revenue Service, all money raised on a crowd funding site is 100% taxable. That means authors are going to have to carefully do the math and possibly raise their monetary goals to accommodate these additional expenses.
In this Ted Talk, performance artist Amanda Palmer, encouraged artists to “ask without shame.” Amanda by the way, holds the record on Kickstarter for raising the most money for a music project with over one million dollars in donations. The money she raises not only goes to fund the project but also allows her and her band to giveaway their work free of charge. In an age where most artists discourage torrents and file sharing Amanda and her band actually encourage it. This is blatantly counter intuitive to most corporate business models in which freebies are used only as a short term marketing ploy. On the flip side, Amanda’s strategy is more long term, using digital music as a promotional tool, rather than a money making venture. As the industry argues over .99₵ songs, Amanda and her band have successfully cut out the middle man and are setting up their next tour.
So how does an author repeat this success?
Social Media to the Rescue?
Many indie artists take to the web by guest posting on popular blogs, or even advertising on social media sites like Facebook to raise awareness for their self-publishing endeavor. Those who have a larger social media following generally do better than those that don’t. We’re talking about 25,000+ “engaged” followers.
Here are a few tips on how to run a successful campaign:
- Successful campaigns are funded by tiny increments, so set the pledges to smaller amounts like $5 or $10.
- Campaigns with videos explaining your project and enthusiasm seem to do better than those without them.
- Have a compelling blurb explaining your project with a call to action.
- Promote your project on social media because most projects are funded 80% by family and friends.
- Fund other projects in popular niches like movies, gaming, or music to get visibility on the site as well as some good karma.
Crowd funding can be a viable path for the more savvy author who already knows how to promote a book since the steps are so similar, but even then, there are no guarantees of a successful crowd funding project.