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Entrepreneurs, dreamers turning to crowdfunding in droves

Investors beware » Read the fine print, don’t expect big returns, consumer advocate warns.



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"We started small because we didn’t know how well it would take off," Bench said. "But we’ve pushed into social networks, we’ve got a lot of people saying, ‘I want to buy one,’ and groups like telemarketing companies and AARP have started looking at the campaign. It’s fantastic."

Bench adds that crowdfunding is not just about raising capital.

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At a glance

Before you crowdfund

Do your homework » The more information available about the pitch, the more legitimate the campaign is likely to be.

Check out initial funds » Friends and family typically provide the first 20 percent of funding to a campaign, so be careful with campaigns that have raised less than that in the first few days.

Look for active links » Official websites, social media presence and press coverage can be used to help validate campaigns.

Keep an eye out for updates » Has the campaign owner provided updated information about the campaign? If you see updates every one to five days, the campaign is more likely to be legitimate.

Source » Indiegogo

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"We’re getting a lot of great market feedback," he said. "If we can expose more people to the research, that’s just more people we get to engage with potentially."

Podcaster Scott Johnson agrees that crowdfunding is more than a fundraising tool. His passion for video games and science fiction led him to podcasting out of his Eagle Mountain home, which led him to create an annual in-person event for his fans called Nerdtacular. Johnson says the event, which is now paid for through crowdfunding, is a way to build community.

"It dispels this idea that geeky, computer-savvy nerds just sit in a room in the basement and play video games," Johnson said. "People who are into that are also extremely social creatures who want to be with other people like them."

Johnson said Nerdtacular has evolved into a two-day convention that draws hundreds from around the globe. To fund the 2013 Nerdtacular, he’s raised more than $30,000 so far on Kickstarter.

Creating a successful campaign

Kenny Olsen describes himself as an IT guy-turned-farmer. Two years ago, he bought a 5-acre plot in West Haven, hoping to teach his young children the value of hard work and to find fertile ground for his passion for gardening and beekeeping. For seed money for an apiary, he turned to Kickstarter. He set a goal of $4,000, but in the end, he only raised $1,207. On Kickstarter, an unsuccessful pitch gets no money.

"I had to learn about how the process works and what brings in pledges," Olsen said.


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Not discouraged, Olsen tried again, this time making a pitch for a new tiller. He said having a short video, online updates, an appealing message and perks (he offers jars of honey, T-shirts and field trips to the hives) added up to success.

"I realized that it’s not about people just giving you money," said Olsen. "It needs to be a project that everyone wants to succeed and they want to share in that success."

A new pitch for the apiary earned $1,085, well over his $337 goal.

Olsen’s experience lines up with Indiegogo’s tips for a successful campaign. The platform has found that campaigns with a video component on their site raise 114 percent more than those without and 93 percent of successful campaigns offer perks.

New crowdfunding platforms

Just as the interest in crowdfunding has exploded, so has the number of online platforms that enable the activity. The Crowdsourcing.org survey showed that there were 452 active crowdfunding platforms worldwide as of April 2012 and that number was expected to balloon to 530 by the end of 2012.

One of those is Utah-based RallyMe, a crowdfunding platform that caters solely to athletes and sports teams. Founder Bill Kerig is also a documentary filmmaker whose latest production is "Ready to Fly" about women’s ski jumping. He got the idea to build a crowdfunding platform after following around athletes and watching them constantly fundraise. He says crowdfunding is more efficient and more effective than sponsoring a dinner.

"Five years down the road, every athlete and team out there is going to use some sort of crowdfunding, for sure," Kerig said. "They’re not going to keep doing yard sales."

Since launching in November, he says more than 50 campaigns from little league hockey teams to Olympic athletes have raised thousands on RallyMe, including Utah ski jumper Lindsay Van, who raised $20,000 to support her training for the 2014 Winter Games in Sochi.

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