Funding A StartUp With Kickstarter

Higher Hangers Closet Organization

funding a startup crowdfunding kickstarter video production new focus films higher hangersA great idea for business needs capital behind it to get it started, especially a physical product.  When I first saw the idea for Higher Hangers, I was immediately excited about getting on board with the promotion.  It was another chance to see how funding a StartUp can be done directly from the customer.

The idea we had for Higher Hangers was to show the problem of too little closet space in an entertaining way rather than the expected approach of someone complaining about the small closet.

After a few weeks of working out the concept of how best to promote this extraordinary hanger, we at New Focus Films created this teaser video ad:

A month later, Higher Hangers launched the Kickstarter.  Funding a startup like this requires a healthy chunk of change, and Higher Hangers managed very well, funding at nearly 400% within a month.

Our Kickstarter video for Higher Hangers was a combination of the founder and CEO, Drew Cleaver, and our product commercial for the company.

Creating a Kickstarter video this way has the added benefit of producing two videos for one.  Once the Kickstarter is complete and the initial Startup is funded, they now have a commercial to use as well.

We created the 30 second teaser as a Pre-Roll advertisement in order to build intrigue.  This was a shortened version of the main Higher Hangers commercial.

Additionally, we created a Director’s Cut version of the commercial.  Because the video ad plays like a short film, it has more potential to hold the attention longer than most ads.  If all else, it’s just entertaining, even if you don’t buy the hangers.

Higher Hangers Commercial (Directors Cut) from New Focus Films on Vimeo.

If you do buy the hangers though, and I’ve bought mine, you’ll be glad you did.  Higher Hangers are hangers that hang your clothes higher (or closer to the closet rod) which then gives your closet more space beneath.  They’re also thinner than most hangers and have a velvet coating so your clothing clings to the sleek design.

We’re proud to have worked with Higher Hangers and look forward to their continued success.  I’m sure we’ll be seeing much more of them along with many imitations wishing they’d come up with the design first.  Don’t be surprised if before long, hangers don’t ever look the same.

Why Use Kickstarter For Funding A StartUp?

Many StartUps are going the route of crowdfunding because it’s so accessible; the crowd-fund industry is growing and the community is increasingly active.  It doesn’t take much to raise a boot-strapped seed investment.

Obviously, it’s going to be more difficult if your startup is at a later stage or needs $1 Million Plus to get off the ground.  In this case, there’s still the angel investors to reach and the venture capitalists to connect to next.

There are other ways though.  Through Equity Crowdfunding, it’s possible to raise a lot more money from investors getting in with bigger contributions than you’d normally get through the standard crowdfunding platforms like Kickstarter and Indiegogo.  Since changes in how Equity Crowdfunding is managed, non-accredited investors can now join the game which allows for much more funding opportunity for StartUps.

It is important to thoroughly consider this first though.  Many venture capitalists don’t want to invest in a company that’s indebted to a large group of unconnected investors.  Our suggestion is to discuss it with some of the venture capital groups you’re hoping to work with first.

As for Kickstarter, Indiegogo and the other traditional crowdfunding platforms, you’re not selling equity so it’s all fair game.  Of course, you’re selling still something even though the euphemism is called a “perk.”  The perk is the thing you have to give back and it may include shipping, so make you sure you’ve got it covered within your lowest financial goal.  In other words, don’t over-promise. We’ve seen some businesses get started with a $100K+ only to be immediately in debt after the production and shipping of all their “perks.”

Perks should be lower than the suggested manufacturer retail price obviously, but still within your means to produce.  If you’re considering something like platform no matter what your agenda is, funding a startup or getting your next album recorded, you’ll need to deliver whatever it is the crowd is funding.

With your startup, if your hope is receive the eventual funding from venture capitalists and/or angel investors, you’ll need to validate your business idea.  A Kickstarter campaign is a great way to show proof of concept, not to mention actually getting your business started.

It won’t be the end-all, most likely, but it can certainly get you started.  Funding a startup from customers before the product is finished has to be the easiest way to get a business going.

Matt Abraxas Film ProducerMatt Abraxas
Artist, Producer, Marketer

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