September 26th, 2018
Interview with Anna Maguire, Crowdfund it! Author
Source: National Crowdfunding Association of Canada
About Crowdfund it!
Crowdfund it! is a comprehensive guide to the $1.5 billion crowdfunding phenomenon. It is aimed at creatives, start-ups and not-for-profits who are considering running a campaign, but will appeal to anyone who is keen to keep up with developments in culture and digital technology. Written by Australian digital publishing consultant and blogger Anna Maguire, Crowdfund it! focuses on twelve of the highest profile global crowdfunding platforms, including Kickstarter, Sponsume and ArtistShare. It features interviews with successful campaigners, like Phil Bosua who raised $184,000 for his portable scanner box with Kickstarter. Bosua has since gone on to raise $1.3M with LIFX, a wifi enabled, multi-colour, energy efficient LED light bulb controlled by your iPhone or Android. The book provides international accessibility details for all major platforms, and covers creative projects as well as causes, social entrepreneurship, microfinance and business equity.
Anna Maguire is a Sydney-based consultant and blogger specialising in digital training and strategy. She advises on digital publishing and crowdfunding through her consultancy Digireado. Anna has worked in book publishing and digital content for 25 years. She is a former head of production and interactive at Random House Australia and is a passionate advocate for digital developments in the book industry and the emerging Australian ebook and app market. She is a graduate of the Yale Publishing Course and has appeared at the Sydney Writers’ Festival and Ubud Writers and Readers Festival. Anna regularly conducts training for publishing students and authors.
Can you please provide an update and perspective of what’s happening with Crowdfunding in Australia?
In Australia, as with many other countries around the world, crowdfunding has moved out of the shadows and is gaining momentum legitimate form of funding. Still more commonly known for creative endeavours, we have seen great growth of interest and projects posted to our local platforms as well as those platforms globally accessible.
Our largest and most successful creative platform is Pozible and they have just reached A$5 million in pledges – a nice milestone. They work globally and have a few nice features like the ‘Pozible shop’ that enables successful funders to use their platform as a shopfront. Another Australian based but globally accessible platform is iPledg– allowing not only creative projects but also community, charitable and commercial. StartSomeGood has a co-founder who is Australian and they focused on social change projects with great success.
The arts sector in Australia has recently had the opportunity to become more familiar with the benefits of crowdfunding. The Australia Council for the Arts is the Australian Government’s arts funding and advisory body. Artsupport Australia is its cultural philanthropy arm and provides skills and resources to the arts and cultural sector to identify and grow private sector support. In order to promote and educate about crowdfunding they recently undertook training and education in capital cities around Australia.
The Australian Securities and Investments Commission (ASIC) indicated in August 2012 that they were watching and monitoring the situation with crowdfunding in Australia and ensured the public were aware of the risks associated with projects. All Australian platforms work closely with government. Equity based crowdfunding is only allowed by an exception to the Corporations Act and comes with restrictions. These include restricting each company to a maximum of 20 retail investors and AU$5 million in equity in a twelve-month period. Companies are unlimited in their number of professional, overseas and sophisticated investors who have met the requirements of the Act. It is possible that Australia will reconsider legislation after it observes the regulation of this part of the US JOBS Act in early 2013.
What are the major successes?
To me crowdfunding is about enabling people to realise their dream – whether that be publishing a book, changing the world for the better, making a film or creating a gadget that you didn’t know you wanted but just have to have! Each time a project is funded, it’s something that may never have had the chance to exist without crowdfunding.
In terms of the most money raised on an Australian platform, to date the record is held by a quirky project on Pozible called Patient 0. Think video games. Then think about a live-action video game with specially designed weapons where you are in a building over-run with zombies. To survive you need to collect information, decipher puzzles and – of course - kill zombies! The pre-ticket sales raised a new record for Australian crowdfunding at over $230,000 with another $100,000+ sold post-project in the Pozible shop. I love this project and had to interview them for the blog!
In terms of other success stories one of my favourites is Australian Phil Bosua and his team who have run a few projects on Kickstarter. I’d known of Phil for years due to some app work he did with publishing projects years ago and it’s been inspiring to watch how he has used crowdfunding to further his entrepreneurial aspirations. When I interviewed him for Crowdfund it! he was running a project for a portable (and foldable) scanner that you sat your smart phone into. He raised $184,000 for the ScanBox project. He has recently raised $1.3 million on Kickstarter for LIFX - a wifi enabled, multi-colour, energy efficient LED light bulb you control with your smartphone. I’ve supported both of his projects and can’t wait to see what he comes up with next. He’s an Australian who has achieved great success and profile through crowdfunding and that excites me.
What are the major challenges?
It’s important to remember that on average more than half the projects listed don’t achieve funding. This can be due to a lack of planning, poor communication or not understanding that the success is due to the work of the project creator in gaining support from their networks. The most important message is that funding generally comes from the close or wider network of the project creator rather than the platform and people just cruising to find out what they can support. It’s not unheard of for someone completely unknown to the creator to make a nice large pledge, but there are no guarantees. Being informed and educated is the best preparation for any campaign.
Another potential challenge is if a project is SO successful that the creator is not prepared for the volume of rewards to be delivered and the intricacies of taking a project into a large production run. All options need to be considered in the planning phase and it’s vitally important that supporters receive timely communication. Personally I don’t mind if my reward is running late as long as the creator keeps in touch and doesn’t just disappear leaving me feeling as though they won’t deliver.
What’s the future of Crowdfunding?
That’s a big question and realistically only time can tell!
I think there will be a huge growth in this area as it seems to be gaining in popularity. A bit like the tech boom there will be a number of new operators coming into the market, sometimes with the idea it’s just a matter of taking a nice percentage of the successful funds raised. Over time there will be a correction to the market and the strongest, smartest and most professional platforms will survive.
Crowdfunding will continue to grow in popularity as a legitimate source of funding for creator and entrepreneurial endeavours. As it grows there is the potential for ‘funding fatigue’ as everyone mines their networks to realise their dreams. Again, only the best and brightest ideas will achieve success. Equity-based funding will become accepted as a valid way of unsophisticated investors betting on the ‘next big thing’.
Governments will become more involved, especially as some project creators fail to deliver on their promises and we can expect more regulations about who carries the responsibility. All in all I think crowdfunding will go the way of a few other areas like telcos and the early internet pioneers. Boom-correction-business as usual. What that time frame will be my crystal ball isn’t telling me!
Who should read your e-book, Crowdfund it!, and how will it benefit NCFA Canada members?
Written with a global audience in mind Crowdfund it! lists information on 38 platforms including their fees and if they are globally accessible. A comprehensive Tips to Success gives readers the knowledge gained through six months of research in this area as well as numerous conversations with successful crowdfunders and platforms. The book includes twelve in-depth case studies of people who achieved crowdfunding success and gives a rare insight into how they planned and executed their campaigns.
It appeals to people and companies in the creative sector, start-ups, not-for-profits and individuals who are thinking of running a crowdfunding campaign.