Financing / Crowdfunding : A Very "Biased" Reality Check on Crowdfunding (response to a Huffington Post article) by Merri Christi Pemberton

I just finished reading an article by Brad Chase (Partner at Capital Media Partners) regarding what he felt is the reality of crowdfunding. Mr. Chase has worked in communications and public relations for Fortune 500 companies, so as a filmmaker and musician who value productive communications with my audience especially when it comes to marketing, I wanted to hear the advice he wanted to give. Well, what I found was more of a very biased view against crowdfunding (although he may not see it that way), and a big shout to the Venture Capital industry. If you look at his article, especailly when he says that Crowdfunding is not a replacement for VC, you can see that he is delivering a "side punch" to the crowdfunding idea as a "main strategy" for funding, and then putting a shout out to venture capital method. I do agree and disagree with statements he has made in his article,and I have learned a long time ago that one person's "reality" isn't another person's reality. The reality of crowdfunding differs, and it can differ dramatically. Here is much of what he stated, and then my comments: He said: "Crowdfunding is an alternative, not replacement for VC. It's a viable way to bypass the ostensibly slavish and old school venture capital world, but focusing on one funding stream alone is increasingly common. Ignoring or downplaying traditional funding mechanisms is arrogant and foolish." Traditional funding will always have importance, but we are free to downplay or ignore this this method due to the options and flexibility we have with crowdfunding. Anytime you offer a person a way to achieve a goal "independently", they will often take it. Human nature often persuades us to be independent. It is actually innovative and daring to buck the system, and try another method. How many times have we heard someone say "you can't do that...or it will fail", but you will always have that maverick bunch who says "oh yeah....?" and they prove they could do it. I have always had people tell me I can't get money by doing something this way or that way. When a person says that to me, that only makes me want to go at it even harder, and success is often found when a person becomes that determined. Why is he so adamant on convincing people to absolutely not downplay or ignore traditional funding? If another method works better for a person, and crowdfunding has been proven to do be successful to those who knew how to do it properly, then shouldn't we be happy for them? Why does he care if some people say we should ignore traditional funding for a more independent approach if its just their opinion..unless the independent approach is now threatening the existence of traditional funding. He said: "Relevant narrative telling is an art and a science. Countless campaigns fail because narcissistic inventors drink the juice. They fail to research and grasp the nuances in the psychographics and demographics of their target audiences. Attention spans don't exist anymore. If selling a game or app, they need to show how it works. Funny pitch videos lacking substance, ignoring the product or focusing on undeveloped mascots can deliver laughs. Not dollars." Attention spans DO exist, or else you are not human. You need to sift through the noise to get your audience's attention span,which I do agree isn't always easy because so much noise is out here , especially on the internet. If your product is worth it to your audience, they'll listen. I have seen plenty of people put their money in the things and into people they believe in, a cause, or something that they felt would make their lives better..but the product had to capture their attention first. He said: "Real social media skills are needed. It's easy to get starry-eyed about the process, but having a good social network does not make campaign success preordained. Communications campaigns require audience development and strong messaging. Knowing how to use Facebook and Instagram is fine and well, but it's a big leap to move from having lots of friends to recruiting strangers to give up dollars." Yes, real social media skills are needed. Having a good social network is important, you need people who will listen to you and are willing to be your cheerleaders and influence others to come to you. When he says you need audience development and messaging...it just means you need an audience that think you are "all that and a bag of chips" and you need a message that resonates with them and puts them in a choke hold. They need to be excited about you and what you offer. Oh dear....he said this too: "More investors means more backend work. Much of crowdfunding's appeal is the freedom it gives to run the business independent of guys in suits. But having hundreds or thousands of investors can be just as restrictive as a single investor. Engagement doesn't end when the target goal is reached. It's just begun. Communicating with all of them is a labor-intensive and important process." Don't let that scare you...actually engaging your audience-investors is FUN! You want them to need to hear from you. When you deal with crowdfunding like Kickstarter or Indiegogo, you are giving the audience a product or an "experience" in exchange for a certain $ amount they give to you. Like with musicians, they may give a free pass to their concert and dinner with the band in exchange for a certain money amount. So, the engagement you are doing with your audience-investors after they receive their products is basically engagement that you would do "anyway" for your audience unless you promise them something more (e.g..If you give x$ amount we'll give you a Skype call every month). Think of it like this, your consumer audience (everyone who purchased your product) is an 'investor" of some kind. So, use social media to give a shout out to them and keep them updated on what you have in store for them in the future. With crowdfunding, your fans are your investors. Fans just want you to appreciate them, share who you are with them, and give them products or experiences that they will never forget. He said: "Crowds are volatile. Faceless crowds can giveth and taketh. Anonymous wild cards take to Twitter and YouTube to trash corporate reputation every day with little hesitation. From a Domino's Pizza cook to a FedEx delivery person, viral phenomena build around poor customer service and acts of lone individuals. The results can be devastating on brands, but entrepreneurs frequently skip scenario planning and crisis management. When it hits the fan, it's too late." Well welcome to business! Mr. Chase's explanation of this actually persuades me of why crowdfunding is more exciting, and why you must always take care of your audience who invest in you and love what you do. If something does hit the fan where someone is trashing you, you got a lot of "fans" who will come to your defense without you having to lift much of a finger. If someone decides to cause trouble and/or trash the famous singer Taylor Swift or her music, even though she has a team who specialize in managing any crises situations, her fans will be the ones coming out of the gates to hunt you down and embarrass you. Again, that's the great part of taking care of your fans, and the fans will take care you. Debbie Downer...He said: "Success stories are just that: stories. The prevalence of anecdotes in the news media and social networks clouds the fact that most campaigns fail. With new platforms boasting higher acceptance rates, "failure stories" will climb astronomically". So what? What does that have to do with each individual person who wants to use crowdfunding? Everyone is different, everyone has a different audience, and anyone can succeed..just like anyone can fail. The people who are the most successful did what they were passionate about in the face of the many failures that they have experienced and those they have seen others experience. Success stories AREN"T just stories, they show us that success can happen even in the midst of failures. Without failures, many of us wouldn't be as strong and defiant as we are now. He said: "Selling incentives in place of stock doesn't work. The call to action can't be, "donate and we'll give you something of equal value." Rewards aren't enough in America's coupon culture. Consumers don't hope for deals, they've been conditioned to expect them. How long until there's a Black Friday in crowdfunding?" Tell that to the Kickstarter and Indiegogo campaigns that have worked and raised money through giving their audience something in return for paying a dollar amount. The author is just being biased. Crowdfunding is here to stay for a long time, just do your research, take care of your audience, and give them an experience that they will never forget. In return, they will take care of you. Listen everyone...I am an indie filmmaker/musician myself, I have questions about crowdfunding and listen to people who want to give advice. What I also do is to remember that everyone has an opportunity to succeed in whatever they want to do. Very few things come close to when you realize that your fans are willing to put their money into you and your work because they believe in what you do. Unlike VC's, your fans are more into "you" and what you represent to them (which shows in your work and products). Even in this high tech, fast paced, and noisy age we are living in, people are still loyal fans to those who they feel represent their values and provide good products or experiences. People are also forgiving when you make a mistake, as long as you admit it and fix it. Crowdfunding may not be for everyone...I am doing something a bit different this time around for my film although its inspired by Kickstarter/Indiegogo and i am not working with any VCs as of yet. Crowdfunding, however, is still a very innovative and even revolutionary way to finance your project or product. You have more control over the money and you answer directly to your audience not the VC's. I hope everyone can enjoy the journey that comes with getting your project or product off the ground, getting the financing, and giving your audience what they want. http://www.huffingtonpost.com/brad-chase/a-reality-check-on-crowdfunding...