Crowdfunding site Kickstarter is popular here, but does the model hold up?

Crowdfunding site Kickstarter is popular here, but does the model hold up?

Use of the crowdfunding site Kickstarter is booming in Charlottesville, and it’s no wonder. The website was created in 2008 as a low-risk fundraising platform for creative projects, and it’s been embraced with a good deal of success here, where indie-minded artists and musicians—and those willing to shell out a few bucks to support them directly—are thick on the ground.

More than 50 projects started in the Charlottesville area have had successful Kickstarter campaigns. Local band Sons of Bill financed its third album through the site, and other area musicians have followed suit. Singer John Thackston, a UVA fourth year whose Kickstarter campaign footed the bill for his first record, deemed the site “the single most important development in the music industry since magnetic tape.”

But as Kickstarter has grown, some see it facing a kind of mission creep, making the company and observers revisit the question of what defines a creative project—and what’s reasonably enforceable.

Unlike other crowdfunding initiatives, Kickstarter doesn’t offer backers a cut of project revenues. Instead, creators post projects online and offer rewards to entice donors. The better the incentives you offer, the better the odds of reaching your funding goal. Fall short of your goal, and those who pledged won’t get charged, and you won’t see a dime.

The model has proved popular—and successful. Since its launch, Kickstarter users have funded 26,000 projects. Two Kickstarter-funded films have received Oscar nods, and site-funded art exhibits have been displayed at the Museum of Modern Art and the prestigious Whitney Biennial.

Still, backing a project is always a gamble, because creators aren’t obligated to complete their projects as promised. Kickstarter spokesman Justin Kazmark said most people organizing campaigns do follow through when they get funded, largely because there’s a good deal of accountability in small, creative networks. “A lot of times the backers are actually people the creator knows—friends, family, fans,” he said. “It takes a lot of work to get fans and maintain friendships, and you don’t want to burn those bridges.”

Local photographer Peter Krebs used Kickstarter to fund his exhibit Monticello Road, which debuted at The Bridge PAI in April. Krebs wanted his photographs to be “completely accessible to everyone—far beyond the usual suspects who go to openings.” He explained, “Everything was either free or pay-what-you-can. Yet it all cost money.” That’s where Kickstarter came in.

“I wanted to find a way to fundraise that was completely optional and that would allow people with little means to make small contributions and have it be really meaningful,” Krebs said. “The whole thing is about community, and this allowed really wide participation.”

Crowdfunding liberates artists from the traditionally sales-driven art world, said Krebs, who praised Kickstarter for “taking the whole selling business out of the equation.”

But some are seeing serious profit potential in the model. While Kickstarter doesn’t allow people to request money for general support—“fund my paycheck” pitches get pulled down from the site—businesses are increasingly using the site to boost sales and launch new products. Here in Charlottesville, clothing company Robert Redd launched a Kickstarter campaign to raise nearly $300,000 to fund a new T-shirt line. Director of operations Todd Campbell explained, “We’ve been mulling different ways to finally launch our ladies’ offerings, and Kickstarter crowdfunding is really catching on right now.”

Connecting with consumers is crucial, and crowdfunding could help bridge the producer-consumer divide. “It gives your customers an opportunity to validate what you’re doing and give their input at each step,” Campbell said. In e-mails promoting the campaign, the company called on people to “support Robert Redd’s growth.”

But the approach didn’t appear to be paying off for the company. With a little more than a day left for pledges, the project had still garnered less than $20,000.

The growth in use by those pushing business ventures has also opened the door to flops, and even scams. People looking to fund tech projects have raked in millions for their inventions—even though many lack the know-how to turn their wild ideas into tangible products.

Take Seattle company “Eyez” for example. Last year, the would-be creators of video-recording glasses earned a whopping $343,415, meeting their goal, but the backers have yet to receive finished products, and many fear the creators have abandoned the project altogether.

Who’s to stop them? No one, it seems. Kickstarter can’t take legal action, and since the average donation is small, few backers have a big enough stake to sue the project’s creators.

So are companies twisting Kickstarter’s original mission by painting purely profit-driven projects as creative exercises? And does the chance for scams make the business model suspect?

No and no, says Kickstarter. According to Kazmark, there’s room for everyone. “Kickstarter is in some ways arts patronage,” he said. “In some ways it’s commerce.”

And though Kickstarter employees aren’t scouring the site for scammers, Kickstarter users act as their own police force.

“You’re not on something like eBay where it might be one-to-one, and in order for something bad to happen, you just have to pull the wool over one person’s eyes,” Kazmark said. “On Kickstarter, there’s a lot of people looking at the projects, making sure they are who they say they are.”

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