Sunday, October 30, 2011

Kickstarter @ Union Square Ventures

Over the past few weeks, we’ve taken trips to several start-up companies in the media industry, as well as some well-established organizations that work in media.  It has given us a good insight on how one starts a media company like Course Horse or LocalUncle.  However, there is always the one issue that everyone faces; How do we fund this?  The answer is companies like Union Square Ventures.

Union Square Ventures is a venture capital company that funds several unique creative projects in the hopes that the project is a success.  They are based in Union Square, but the company funds project all over the country.  It was founded by Perry Stricker, who originally did it as part of a method of funding a jazz and in New Orleans to go to a music festival.  While he was unsuccessful, it did get the platform going.

General Manager Gary Chao and Community Manager Cindy Hu presented to us.  They worked out of an office in Union Square that was going under a lot of renovation at the time, but it was a decent-looking space.  It wasn’t exactly McGraw-Hill’s building in Midtown, but it served its purpose well.

Their presentation was mainly about Kickstarter, a a funding platform for creative projects.  To receive funding, one must do the following:

1) Pitch the project to the Kickstarter team
2) Put it on the Kickstarter site
3) Set an appropriate monetary goal for your project
4) If the Kickstarter team aproves your project, obtain funds.

Once the project is up on the site, visitors can choose to pledge a certain amount of money to the project.  The objective is to reach the monetary goal at a certain point.  These pledges can be as small as $25 or as big as $1,000.  Once the goal is reached, the profit comes in.

There are several different projects funded by Kickstarter, each divided into categories like art, film, photography, and film.  They have a 44% success rate, with over 1,300 successful projects and 1,000,000 total backers.  One that deserves special mention is the Greenaid Seedbomb Project. This project involves the use of clay seed bombs, which you can throw at an open grass area, and several different plants will grow there.  The seedbombs are dispensed in gumball machines, which were placed in flower shops around Los Angeles.  Their goal was $10,000 in pledges, and they reached it by July 2010.  

Union Square Ventures receives 5% of the profits from successful projects, and they do not charge anything for unsuccessful projects.  Also, charitable, non-profit organizations are not considered for funding, as there is a lot of confusion as to where the money is going.

This was an interesting look at how creative projects get their start.  I never considered the process of how a project is funded, and now I understand a little better.  The Kickstarter platform is an innovative way for creative individuals to get their foot in the door and really create something amazing.  Who knows, maybe further down the road, I will pitch a project of my own to Kickstarter, and see what happens.

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