Sunday, November 25, 2012

Raise a million, spend $900,000. Keep $100,000.

Interesting blog post by someone (AFP and The Grand Theft Orchestra) who raised a million on Kickstarter. Read her blog posting for more detail. She describes where the money went:

Old bills and paying back bank loans $250,000.00
CD book manufacturing and shipping costs $105,000.00
Vinyl production costs $30,000.00
Art books $80,000.00
Art book production costs $15,000.00
Neil and Kyle books $30,000.00
100 Turntable packages $15,000.00
Arts and Crafts 7 inch packages $30,000.00
Six City Tour $10,000.00
House parties $10,000.00
Art party visual artists $20,000.00
Commissions $150,000.00
Four or five music videos $80,000.00
Kickstarter and Amazon fees $75,000.00
TOTAL $900,000.00

The first thing to note is the first item. What old bills? Bank loans? $250,000? That 25% of the raise. Commissions? $150,000? Most startup company crowdfunding campaigns will not have these expenses (I hope...). The other line items are marketing, production and pledge fulfillment expenses.

Several of these line items are, well, interesting, but, so what? There is no need to nitpick. This person energized her fan base, ran a marvelous campaign and got a significant amount of money to do what they truly love.

Bravo.

The final thing to note is this: they still have $100,000 left over. Most people living in the United States would welcome a bank account of this size.

And remember, every dollar raised gave this band an opportunity to do what they love. Most people would welcome this, too.

My book on Crowdfunding: See: http://www.apress.com/9781430247555

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