Reprinted from Las Vegas Weekly
OUTSTRETCHED HANDS: IS CROWDFUNDING REALLY MORE THAN ONLINE PANHANDLING?
Thu, Jan 23, 2014 (midnight)
I’m feeling the burn of the beg.
It seems everyone from the needy to the philanthropic, the destitute to the enterprising, the lazy to (especially) the scammers are extending their upturned hats at me.
This isn’t the introduction to some Tea Party rant. My heart still bleeds like it did when I attended my Left Coast college—an endeavor that, coincidentally, wouldn’t have happened had I not appealed for loans, scholarship dough and other financial gifts.
Nowadays, however, I’m just a guy making humble journalist wages and living on a budget—unbeknownst to those who see me as a human ATM machine.
To wit: There’s the parade of panhandlers working both the Maryland Parkway/Sahara Avenue intersection and my neighborhood grocery store every time I come around. One dude wasn’t above peeing on my car when I declined to help.
There’s also the steady stream of email solicitations for charitable donations—be it from nonprofits or loved ones with noble passion projects—and political campaign financing, the latter still relentless despite my best efforts to unsubscribe from every mailing list.
And then there’s Kickstarter and Indiegogo.
I can’t scroll down my Facebook news feed these days without noticing pitches from musicians whose band funds don’t cover a 12-pack of PBR, much less the purchase of a new tour van; entrepreneurial acquaintances trying to ensure a certain shoe company doesn’t own everything Downtown; and, in what felt like a final straw of sorts, the Rio hotel-casino hawking “exclusive pre-sale packages” for its future VooDoo Zipline attraction.
(Is a casino really hitting me up for dough? Not really, and more on that in a minute.)
Crowdfunding—the raising of money for ventures, projects and ideas through social networks and the Internet—is exploding in popularity. Its campaigns have included movies cult fanbases want made (see: Veronica Mars), tech development (the Pebble smartwatch), disaster relief (the $2.5 million raised for Hurricane Sandy victims on Fundly), the college expenses of broke students (a popular category on crowdfunding/“cyberbegging” site BegsList), and start-up companies (aka equity-based crowdfunding).
This communal and online approach to building capital is having its zeitgeist moment. According to research firm Massolution, donors pledged $2.7 billion to over a million campaigns last year, up 81 percent from 2011. Other experts say that number will pass the $5 billion mark this year. UNLV Professor Andrew Hardin, director of the school’s Center for Entrepreneurship, credits much of the surge to the clamor for equity-based crowdfunding, its newness and buzz factor, and “the popularity of the Internet and how comfortable people have become with electronic commerce.”
Crowdfunding isn’t just blowing up on my Facebook page—it even has its own conventions. The Global Crowdfunding Convention and Bootcamp took place October 14-16 at M Resort, with a mostly entrepreneurial focus. At the “Building Social Capital” panel I attended, there was talk of “influencers” and “crowdbuilding” and “niche platforms” (read: not Kickstarter or Indiegogo), among other discussion points that seemed more geared toward equity crowdfunding than, say, campaigns to finance a band’s new album. Though a band might have found a new selling point when panelist and crowdfunding expert/entrepreneur Eli Regalado reminded us, “You’re not saying, ‘Buy this,’ you’re saying, ‘Pre-buy this.’”
Which brings us back to VooDoo Zipline. Project rep Amanda Brophy says New Capital Ventures—the actual owner of the attraction—began the Indiegogo campaign “to merely offer pre-sale packages.” During the six-week campaign, it sold 76 packages, its $4,305 gross falling far short of the $75,000 goal (though VooDoo purchasers will still get their “perks” when the ride opens).
Despite being a thrill-ride enthusiast, I passed on the pre-sales. I did, however, buy into the successful and high-profile Save the Huntridge campaign on Indiegogo, designed to show potential investors the community’s support in restoring the neglected theater. I wasn’t pre-buying anything—though my gift level did include a free poster—I donated because that’s my ’hood.
And recently, I’ve donated to local quintet A Crowd of Small Adventures’ current Kickstarter push for its next EP because the vinyl edition, which I’d like, will be limited to just 100 copies. It’s funny to think of singer/guitarist Jackson Wilcox as a pitchman—he always looks uncomfortable hawking his band’s wares at shows—but he’s practical and knows his fanbase.
“We chose Kickstarter simply because we didn’t have enough money to make the record we wanted to make,” he explains. “We had no reluctance choosing crowdfunding … Just like a small business needs a loan to get started, we needed some cash to finish things up.” As it turns out, his band garnered $400 over its $4,500 goal.
Given how many local bands have already taken a similar route—and the Securities and Exchange Commission recently proposing rules for equity-based crowdfunding that, according to UNLV’s Hardin, makes fundraising attractive for smaller and family/friend investors—it would seem crowdfunding is here to stay. But if people are already experiencing crowdfunding fatigue (ahem), can increased solicitations be problematic, especially in a town with a still-fragile economy?
“I don’t think so,” Hardin says. “People should just ignore the solicitations if they do not wish to participate.”
I can do that. Ignoring the pee all over my car will be a different story.