Would you say no to $50,000 from Kickstarter to start your farm or food hub?
It’s free money, right?
If you’re thinking about crowdfunding the startup of your new farm, it may surprise you to learn that it’s not as easy (or cheap) as you might think.
Let’s find out what you absolutely must know before crowdfunding and why it’s probably a mistake to do it for the money.
Don’t do it for the money
What?
Yes. That’s right.
Don’t launch a crowdfunding campaign for the money. (We’ll discuss the real reason to crowdfund shortly.)
Monumental effort
Raising decent money on Kickstarter or Indiegogo is no easy task. There’s a reason most campaigns fail.
Most people don’t bother to:
- Write and re-write your sales pitch many times.
- Write a killer script for your video.
- Find music and get/buy permission to use it.
- Hire a talented videographer.
- Brainstorm cool rewards that don’t cost you much time or money.
- Account for exactly every dollar you ask for and explain why you need it.
- Spend time working your on- and offline social networks.
- Have at least 2-3 months to spare.
Kickstarter vs. Indiegogo
The key difference between the two is that you don’t get a cent on Kickstarter unless you reach your funding goal. If you you set a high goal and miss it, so sorry, no cash for you.
A friend of mine raised $21,666 on Kickstarter for a permaculture demonstration site in Barbados, but didn’t see any of it cause their goal was too high.
Indiegogo lets you keep all pledges, but their audience is smaller and they charge more for this flexibility.
Hidden Costs
Kickstarter and Indiegogo take a cut of 8-10% and 7-12% (including credit card fees), respectively. That means subtract $4500-$6000 if you raise $50,000.
To raise that kind of money, expect to pay $3,000-$10,000 to have the video filmed and edited. If you’re lucky the videographer might work pro bono for a cut of the winnings, but don’t count on it.
A good copywriter will cost you at least $1000.
Even if you have good marketing, writing and film making skills, please ask yourself if it’s worth your time. Be realistic about how much you can raise and the cost of raising it.
There’s an easier way
It’s called live rent-free (eg. at your parents), get a job, and save every penny. It’ll probably be less work, take less time and statistically it’ll pay better than crowdfunding.
Why you SHOULD crowdfund
The real reason to crowdfund your farm is not for money. It’s for the exposure and buzz your campaign creates.
Campaign backers are potential customers eagerly waiting to buy your food. And they have friends…
Start first, then crowdfund (if you really must)
Start super small right now without funding.
It’s hard to get people to open their wallets for an idea. If you can say “My farm sells veggies to 10 families. There’s big demand for micro greens, but we need $12,500 for grow lights, racks, irrigation and a walk-in fridge”, you aren’t asking people to take big risks. You’ve already demonstrated your abilities.
Less risk means less convincing. This translates to less time and cost on the crowdfunding campaign and much better odds of success.
Or simply go door-to-door pre-selling your harvest. (Isn’t that called a CSA?)
What’s your crowdfunding story and what tips would you give?
