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Flexible or Fixed CrowdFunding Campaign?

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  • Flexible or Fixed CrowdFunding Campaign?

    After check out a few campaigns lately I thought I would start a thread about this topic.


    Flexible: The ability to receive your funds no matter what

    Fixed: You may only receive your funds if you reach your goal

    The above goes for Indiegogo and Kickstarter

    So when should a project be flexible and when should a project be fixed?

    After creating our own successful Indiegogo campaign Powering A Filmmaker Community | Indiegogo I found some interesting facts, and as promised in my letter head for the campaign I have learned lots about crowdfunding from this project.

    So why do flexible? Personally I felt flexible would be better because I had the ability to issue out the perks right away, so anyone that has contributed their money they would receive their "product" right away. This offers great user experience and as you all know I am all about great user experience here on the forum. But what if my flexible campaign had perks that could not be offered unless I reached a certain goal? This is the current problem with Indiegogo, people are creating flexible funding campaigns and when the amount needed to create the project is not reached, well everyone that had contributed is out of luck. This is a dangerous game that Indiegogo is playing right now, and I will give you a example below:

    Project: A Movie
    Goal: $100,000
    Flexible Funding Campaign: Yes
    Description: We NEED $100,000 to shoot this film, we need your help etc.....

    So lets pretend that this campaign reached $20,000 - That is not enough to produce the film, but yet the person who created the project now has $20,000 to do as he wishes. No project will get made and the people who purchased the perks are out of luck.

    Keep in mind that obviously this is not everyone, I know lots of people that made their film from a flexible funding campaign, but that is because they reached their goal. So be careful when contributing to a flexible funding campaign, your money will be taken out of your account right away and if the goal is not reached then you are Shi* out of luck...

    Do a fixed funding campaign:

    For the sake of all that is good, I recommend that if you are doing a project that can only deliver the perks if a goal is reached then PLEASE only offer a FIXED funding campaign, so you dont get ANY money unless you reach the goal that is needed for your project, it just makes since and if you disagree then please let me know with a reply down below, or if you agree also leave a reply.
    Distribber - Keep 100% of your film's revenue

  • #2
    That's an interesting way of looking at it. Personally, perks are relatively unimportant to me - I support campaigns in which (a) I know the person, whether electronically or in "real life" and (b) I think that it's a worthwhile project. How well I know the person/people involved has a big impact on the amount that I contribute.

    I DO consider whether it's possible for a flexible funding campaign to do their project on a smaller amount of money, if that's what they get. Interestingly, I know several flexible campaigns that have raised significantly more than they targetted.

    Whether fixed or floating, we as donors have no control over whether the project is started and completed, so I consider it a leap of faith to contribute to campaigns.
    Screenwriter and script consultant: www.maralesemann.com

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    • #3
      I've been researching Crowdfunding for a little while now, so while not everyone will care about the perks, the success rate for things WITH perks is MUCH higher than without.

      That being said, personally I'd base my decision off of A: How much am I looking for and B: How confident am I that I'll get it. If you're just looking for a small amount, and you have a strong fan base, you might not worry about it. However, personally, I am not so confident at this point (I'm working on my first campaign now) and lean towards getting something than rolling the dice on getting everything.

      I'm not much of a gambler though, and I can counter my argument with the fact that Kickstarter is the "Short hand" for crowdfunding in a lot of people minds, kind of like Kleenex for tissues, so there is that as well. Though Indiegogo isn't exactly unknown to folks.

      It just, I think, depends on your comfort level.
      Find me on Twitter: [at]Shadoe_Fox

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      • #4
        This is a big puzzle to me. I mean, why flexible funding actually exists. The reason that most people bring forth to explain the advantage of flexible funding is best summarized by an example.
        "Suppose you need $20,000 to make a project. If you use fixed funding and set your goal at $20,000, but then end up raising only $12,000, you get nothing, are back to square one, and likely have to abandon the project. With flexible funding, instead, you can keep the $12,000: this means that you get a chance to raise the missing amount ($8,000) through venture capital or other means and hopefully make the project. So flexible funding is great because even if you do not reach the goal you can keep the money, and with some luck you can raise the missing amount and develop your project, so it ultimately gives you a better chance to see your project finished."

        Now, the above argument apparently makes sense... but not quite. My question is: in the above example why not use fixed funding and set the goal at $12,000? This would not only allow you to get the money even if only a part of your budget is raised, but it would also be cheaper--in this example, if you raise between $12k and $20k, you pay only 4% with fixed funding and 9% with flexible funding. Now, I said $12k, but the idea is that you set the goal as low as you want. I mean, at the end of a flexible funding campaign there will be a decision to make, i.e. whether the funds that you raised are "enough", so that you decide to seek more funding elsewhere, or rather the funds are not enough, you stand no chance to complete your project, and in this case refunding customers is a better option (this is costly because you need to pay the 9% fee AND refund customers). That "enough" is the goal that you should set in a fixed funding campaign, and this would make you better off compared to a flexible funding campaign.

        In short, my view is that fixed funding, with an (appropriately chosen) low goal, can give you the chance to develop your project even if you do not raise the full budget, as with flexible funding, but it would also be cheaper. Am I missing something? It'd be great to hear your thoughts.
        Last edited by simoneone; 12-13-2013, 01:53 AM.

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