How I lost money with crowdfunding

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One of the things I like to do on my blog is share stories about what works for me as an artrepreneur. But this time I have one that did not quite work for me so well: crowdfunding. I actually managed to lose money by running a campaign on popular crowdfunding site Indiegogo. Which I’m not at all happy about, as I’ve let them know – but of course their customer happiness team is hiding behind their “terms and conditions”. Which didn’t make me happy at all. After some back-and-forth emailing and no movement on their part I concluded maybe I missed the fine print, which obviously would have been my bad. Sorry. But I’m happy to help my fellow artrepreneurs and be your guinea pig: behold as I share the tale of my crowdfunding failure with you, hoping you’ll do better than I did.

First of all – the big problem with crowdfunding is that all the major sites provide you with the platform to collect money. They do not at all help to drive traffic to your campaign. Over the course of my campaign, this resulted in many (many) spam messages everywhere imaginable: not only did I get spammy comments on my campaign, I also received numerous emails, as well as messages on my website, blog and social media pages like Facebook and Twitter from companies trying to sell me their promotional crowdfunding services. What a waste of my time. I created my campaign to raise funds, not to spend them on more advertising. Only once you get your “gogo factor” up high enough, the crowdfunding platform might feature you on their homepage or category pages, leading to some additional exposure (which you probably no longer need at that time).

So my kick at the crowdfunding can was a pre-sale campaign for my (now released) photography book A View to Take Home. Our team spent lots of time writing a good campaign page, and we even created a really cool video to explain the project in person. After the campaign went live we send out a press release, and fired off a social media campaign to promote the book’s presale. It all went well. We received a few minor contributions right away, but in the end only sold a few copies of the book. Still – so far so good.

The trouble started when Indiegogo paid out the funds our campaign has raised. It wasn’t much – but better than nothing. However what I didn’t notice in the above mentioned fine print, is the $25 wire transfer fee they charge (on top of their “platform fees”) to transfer the funds into my bank account. Ouch. So from the $40 dollars raised I was left with only $10. After my bank deducted their own $25 for the incoming wire transfer I was left with a negative balance of $15 dollars. Ouch again. And I still have to print and ship the few books that people bought on the site. Now I’m in real pain.

Here’s what happened:

That’s pretty sad. Almost 80% of my funds raised went right back in to Indiegogo’s bank account. From what was left my bank took the remainder as a fee for their services rendered (which equals to them waiting for money to arrive in my bank account).

When I expressed my frustration to the customer “happiness” team I received something along the lines of “Thanks for writing in about this. I’m sorry to hear about your experience. I understand that fees can be frustrating, however, you are informed about the fees during your campaign setup process on the “funding” tab and within our Terms of Use which you agree to prior to launching your campaign. As per our Terms of Use, all fees on Indiegogo are final and nonrefundable.” All of which made me extremely unhappy.

I’m over it now, but I still wanted to share this story because crowdfunding to me didn’t live up to the hype it’s believed to be these days. Actually it costed me a lot of time, effort, and in the end even money. I could have easily pre-sold the book on my own website without having to give up any platform fees, or wire transfer fees, and thus making actual money – which is what raising funds is all about. If you’re thinking about kicking off a crowdfunding campaign – please think again.

P.S. Questions? Text me: 604-210-8668. Your support means the world to me, so if this post helped you, please consider buying a book (for you), a coffee (for me), or checking out a more in-depth course (for free). Thanks! 🙂