Crowdfunding – US Startup Raises $15,000 In 5 Hours

On June 1 in Los Angeles six journalists were fired from ‘GOOD’ magazine. A group of the sacked staffers decided to use Kickstarter and run with the concept of a new magazine called ‘Tommorrow’…the manifesto stating:

“Tomorrow is about (and for) the people who are working out what’s next. Today’s dilemmas deserve fresh eyes liberated from the tired status quo of superficial journalism, boring narratives, and old ideas about what works. We’ll take a look around the corner to bring you stories about the people, the movements, and the trends that are tearing the world down and building it anew.”

Using Kickstarter’s Crowdfunding

After pitching their ‘Tomorrow’ idea to the internet ‘crowd’ through Kickstarter, the group met their first goal of raising $15,000 through crowdfunding within 5 hours.

Four days later they had raised more than $27,528.

The average backer pledged $27.55.

For forward-looking journalists with a great idea, and enthusiastic prospective readers willing to help, Kickstarter seems to be a trend that is working.

“For many journalistic endeavours, rewards for pledging, particularly in smaller increments, revolve around access to the finished products. The site represents a new model for financing journalism, whereby strangers vote with their wallets, and like-minded readers crowd together to bring their dream news sources into existence.” World Association Newspapers And News Publishers

How Does It All Work?

Kickstarter allows anyone to pitch an idea to the Internet at large, with the hope that like-minded people will support it financially.

Startups explain their ideas using text and video. Then they set a fundraising goal and deadline, and build a hierarchy of rewards for contributors at certain points on the donation scale.

If the capital has not been raised by the deadline, nobody pays.

If the goal has been met or exceeded, the money is transferred and the rewards distributed.

Kickstarter Success In The US

Kickstarter launched in April 2009. Since then 2 million people have successfully funded more than 24,000 projects with $250 million in start-up capital.

The Tomorrow magazine is probably the most successful Kickstarter project to date.

What’s Happening In Australia?

Ryan Wardell, founder of Sydney-based crowdfunding platform Project PowerUp, says Australia has to be ‘super careful’ about how it approaches the issue of crowdfunding. He says:

“Part of the reason why it’s hard to raise money is because it needs to be – investing in a start-up is risky… [The JOBS Act] – a collection of provisions designed to help growing companies get the capital they need to thrive, Huffington Post – has the potential for a lot of people to get burnt.”

Fascinating stuff…entrepreneurship IS risky..