Kickstarter offers alternative for startups

Seven years after the recession and the end of the easy credit era it represented, Nevada startup companies are looking at every possible resource to raise funds. This includes angel investors, federal and local grants, and increasingly Kickstarter, an online fundraising website for a variety of creative projects.

Since Kickstarter began in 2009, more than $6.7 million has been pledged to projects from Las Vegas, with 201 projects successfully funded.

“Before you start your campaign, reach out to friends and family about what Kickstarter is,” said Chantal Azamian, whose Kickstarter campaign recently reached its goal. Her Makeup of the Day (M.O.T.D.) Cosmetics found 70 backers who pledged a total of $5,664 to help fund the new product.

“Most people have no clue that this site even exists,” she said of Kickstarter.

There are 15 distinct categories within Kickstarter fundraising campaigns, including: art, crafts, dance, design, fashion, film and video, food, journalism, music, photography, publishing and technology.

Funding on Kickstarter it is an all-or-nothing proposition. Every project creator sets a funding goal and deadline. Backers can pledge a set amount, up to $10,000. If the project reaches its goal, the credit cards of all the supporters are charged at the deadline. If the project fall short, no one is charged.

Backers who support a project receive inside access to the creative process while helping make that project come to life. Part of this access is receiving a variety of different rewards offered by the project creator, depending on the amount of their support. That access often includes a copy of the CD, DVD or book that is being produced. Whatever the level of financial support, project creators always keep full ownership of their work.

“Our mission is to help bring creative projects to life where we have a global community of millions of people,” Kickstarter spokesman Justin Kazmark said. “Financial backers at different levels receive experiences and products for their support, and the timeline (up to 60 days) creates a sense of urgency while being directed by the narrative developed by the creator.”

Kickstarter does not allow projects to fundraise for charity or offer financial incentives. To date 44 percent of projects have reached their funding goals.

“Kickstarter is a way for anybody in the world to have a voice,” Kazmark said. “There are no gatekeepers in the process; it is very democratic. Kickstarter has become a snapshot of what our culture is going to look like in the months and years to come.”

VEGAS EXPERIENCES

A variety of Las Vegas projects and startup companies can be found on Kickstarter, and their range of success varies.

For the Revo360, the first rotating toothbrush that also brushes the tongue, early results were encouraging. They raised over $2,000 in their first five days toward their goal of $30,000. The founders decided to begin a Kickstarter campaign after positive feedback during the annual American Dental Association convention.

“It changes the way your teeth and tongue are cleaned,” said Ray Lee, creative director for Revo360. “The Kickstarter campaign has also given us a lot of exposure to international market, and it is impossible to put a value on that.”

The value of the Kickstarter campaign has been different for Las Vegas resident Scott Kavula of the Twinkle Treat Basket, a candy container with motion sensors and light-emitting diode lights that dramatically increases children’s visibility on holidays like Halloween.

Although the project has gotten off to a slow start on Kickstarter to meet the goal of $25,000, feedback received has allowed Kavula open new horizons on the potential of the product.

“It has helped organize us by giving us a website address to show potential investors,” Kavula said. “We have been getting a lot of additional exposure. We are a woman-owned business and being on Kickstarter has allowed us to identify some great international manufacturing leads, too.”

Unsurprisingly, in the bright lights of Las Vegas there is another light-related project on Kickstarter.

4EverLight international Inc., a family business, is offering The Orb, a hybrid light that eliminates glow sticks and is enjoying success on Kickstarter. With two weeks remaining, pledges had passed the halfway mark to its $67,000 goal. The Orb can be charged by universal serial bus so it stays bright all night and is also a flashlight.

“We have had to endure over 30 days of 14 hours a day on the computer so we can raise the capital to buy the product in bulk and pass along with savings to our customers,” said Alexis Nagel, cofounder of UV Packlite, The Orb’s parent company. “The responsibility is on you to reach out to anyone who will listen, Kickstarter is a game changer because you don’t have to rely on banks and angel investors.”

Beauty is in the eye of the beholder and, for Azamian, the success of her cosmetics company proved an enjoyable experience which was helped by her educational background in marketing.

“The incredible feedback that I received from my backers and social media supporters was a highlight of the campaign,” Azamian said. “Kickstarter is a great tool to use, but you definitely need to implement a strategic marketing campaign before you launch.”

Alexander Weart, operations manager for Clever Chefs Catering, hasn’t experienced Azamian’s success, but has still taken valuable lessons from the campaign. The company’s campaign raised only $75, well short of its $1,500 goal.

“We underestimated how much marketing we would have to do to let people know we are looking for backers,” says Weart, who plans on starting another campaign this month after the group’s recent appearance at the Las Vegas Foodie Fest. “Startups have to be willing to think outside the box, constantly be positive and lay the groundwork for their own success.”

That outside-the-box thinking is perfect for filmmakers, who have a heavy presence on Kickstarter. Often, the most successful Kickstarter campaigns have a video component.

Heather Mehudar, a budding filmmaker, is using her Kickstarter campaign to help talented Las Vegas actors complete requirements to submit to the Screen Actors Guild. Her campaign goal is $2,000, but as of Oct. 20 she had raised less than $50.

“It has been an eye-opening experience since I am not selling a tangible product,” Mehudar said. “I am asking people to contribute money so I can make a product that makes them think and hopefully gets a few laughs.”

Mehudar’s main complaint of the Kickstarter process is spam messages from marketing ‘gurus’ who promise to help raise money for Kickstarter campaigns, but only after you pay them first. She tried one for a small amount with no success, as did Louise Broitman, whose Kickstarter campaign is Haute Goodies, an all-natural line of healthy snacks that range from pies to kale chips to cookies and cereals. Broitman believes her Kickstarter campaign suffered because people online couldn’t taste her food.

“I think my campaign is amazing and the food speaks for itself,” says Broitman, whose campaign has raised $1,251 of the $41,500 goal. “Kickstarter seems to work for technology and games but not as much for exclusive, healthy products like mine. There’s nothing like my food in the market, and I will find the right people to notice.”