STARTNEXT | Crowdfunding for Artists, Designers, Creatives
In this article, we will look at 1) What is Startnext?, 2) benefits of using Startnext, 3) why and when to use Startnext, 4) options to raise funds and fees on Startnext, 5) how to be successful on Startnext, and 6) Startnext Success Stories.
WHAT IS STARTNEXT?
Startnext is a German crowdfunding platform. The website was launched in 2010 and is a leading platform in Germany. The website offers a variety of options for crowdfunding including classic crowdfunding for all types of projects, donation based funding for non-profits and crowd-investing for social companies, cooperatives and startups in creative industries.
The website offers projects an initial phase where the project can be presented to the audience for feedback and suggestions. This input can help make important adjustments to optimize the project presentation and generate more fans.
The concept is similar to most traditional crowdfunding platforms. A project is pitched to the crowd using videos, images and text based information. A funding goal is defined as well as a deadline. Supporters received unique gifts for their donation. Once the project is placed online, anyone can donate. The website uses the all-or-nothing philosophy, where unless the full amount is collected, the supporters get their money back.
Since its launch in 2010, the website has successfully funded over 4000 projects by generating over 16 million Euros through crowdfunding. Startnext is the largest crowdfunding platform for creative type projects in the German speaking region. Ideas put forward on the website include those by filmmakers, musicians, journalists, designers, artists, inventors and founders. Categories include movies, music, events, theatre, literature, arts, community, photography, journalism, inventions, design, technology, gaming and fashion among others. Most funded projects have included several films. Some useful infographics can be found here.
BENEFITS OF USING STARTNEXT
There are several benefits of listing projects on Startnext. Some of these include:
- No Cost: There is no cost associated with listing a project on Startnext. Instead, the starter or project initiator can chose an amount to donate to the website willingly. These donations help keep the website free of commission.
- No Risk: There is no risk associated with listing a project on the website as there are no fees charged. If the project goal remains unmet, then no funds are collected and instead all the money if returned to the supporters.
- No Accounting or Forms: There is no lengthy process for registration including forms or accounting matters.
- Extensive Network: The community or network of members on the website provide an extensive audience to project starters to whom ideas can be pitched. This audience includes companies, foundations, funding institutions, universities and even cities.
- Immediate Payment: There is no long wait for funds to materialize and all collected funds for a successful project are transferred to the starter within a specified period of time following the closure of the project.
- Audience Feedback: There is the option of presenting the project to the audience before officially launching the fund collection. This can help the project starter team to gather valuable feedback and input and use this to tweak their project proposal to gain better outcomes from the formal fund collection stage. Even through the entire process, feedback can be incorporated for further stages of funding.
- Word Mouth: Project starters can use the power of word of mouth to spread the word about their projects
- Independence: There is no additional accountability to any stakeholder or shareholder as no equity shares are sold when listing a project on Startnext. Project starters retain complete ownership of the project and only receive financial support from donors.
- Multiple Payment Options: There are many options that potential donors can chose from when giving money to a project. This makes it convenient for most people to donate easily. These options include direct debit, credit card, PayPal, Sofortbanking or advance payment.
WHY & WHEN TO USE STARTNEXT
Projects listed on Startnext are mostly of the creative nature and the platform is dominated by inventors, artists, founders and other creative people. The project to be listed must fit into one of the categories specified. These are art, audio book, comic, community, cultural education, design, event, fashion, gaming, invention, journalism, literature, film or video, photography, music, technology and theatre.
Projects listed must have a clear beginning and a clear end. There must be a goal which is unambiguous and the project must result in the creation of something new and unique. So examples of projects include a movie production, a music album or an invention.
In addition to this type of project, Startnext also allows for a combination of crowdfunding and crowd investing for startup firms or social enterprises. These must be from cultural or creative type industries. The Startnext team curates these projects before they are allowed to be listed for donations.
A project is listed on Startnext when the team behind it needs to gather funds for the product development, product launch or any other creative activity. Often projects may be listed in iterations where a phase is funded, then the product is developed according to the goals of that phase and then the team returns to gather funds for the next round of projects.
Often, a team may list a project to gather feedback and input from a potential future customer base about the proposed project or product or certain elements of the product. This feedback can prove to be invaluable in developing a project that has chances of succeeding with its target audience.
OPTIONS TO RAISE FUNDS & FEES ON STARTNEXT
At present, German and Austrian residents can list projects on the website. Anyone listing on the website must be 18 years or older but there are options to work around a younger person wanting to list a project.
The minimum amount for a project to be funded is 100 Euros but a donor can donate an amount as small as 1 Euro. It is free to list projects on the website as there is no fixed commission charged by the website itself. Instead, the website employs a voluntary donation model where a project starter can choose to donate to the platform after their project has been successfully funded. If the starter agrees to pay, then a 10 percent commission is deducted from the total amount collected. There is also an option for the project starter to decide the amount to be paid as commission to Startnext.
As with most crowdfunding platforms, a processing fee for payments is charged aside from any commission. This fee varies according to the payment method selected.
HOW TO BE SUCCESSFUL ON STARTNEXT
There are several small and large steps that can help a project starter succeed in their funding goals in Startnext. Some of these are:
- Ensure a Well Thought Out Plan: It is important for any project to be well thought out from beginning to end. Half-hearted attempts or lack of enthusiasm will lead to a failed project. Unlike a regular funding agency, it is not enough to complete a form and submit it. Instead, the energy and excitement of a project needs to be communicated and conveyed to the community that is a part of Startnext.
- Generate Strong Content: It is extremely important to have good quality photo and video supporting the project. Videos should be brief but captivating and photos should be high resolution and relevant to the product, the project or the message being communicated. In addition, the project description should convey factors such as authenticity, transparency, professionalism, a fun side and others which will make the project worth supporting.
- Use Networks Effectively: Aside from the community within Startnext, each member of a project team also needs to leverage their own network into giving feedback, support and donations. This network is usually made up of family, friends, acquaintances and coworkers. This network can be accessed through social media platforms and their initial support can lend the credibility often needed by external donors. Word of mouth can also help spread the word through networks and increase support.
- Use Website Resources: The website provides tools and tips to leverage networks and make solid pitches to the Startnext community. These should be made full use of as the experience gathered by the website team may often be more extensive than that of someone listing a project for the first or even second time.
- Offer Interesting and Unique Incentives: The rewards offered in exchange for a donation should be unique and intriguing. These should be products or offers that cannot be purchased in any store by the potential donor. Only then will they serve as an incentive to donate.
STEPS TO ENSURE A SMOOTH STARTNEXT EXPERIENCE
The website team takes certain necessary steps and makes some suggestions that can ensure that the process runs seamlessly and gives the best return to the project starter and the crowdfunding community as a whole. These include:
- Starter Verification: A starter’s identity needs to be verified before they can collect any money for a project. This is a legal obligation and the website does so through a Bankident form.
- Use of Real Names: Since a significant sum of money is often involved, it is necessary to ensure transparency and create trust within the community on the website. This is ensure through the mandatory use of real names and a personal photo to go with each page and profile. The person listing the project acts as the key point of contact for questions, suggestions, feedback and clarifications from the audience.
- Project Documentation: For further transparency and documentation, once a project receives a donation, it cannot be removed or deleted from the website.
- Copyrights: It is essential that the project put up for funding on the platform be free of any potential copyright violations and not be against any sort of German laws. There can also not be any racist, offensive or obscene element to the project.
- Pitch Video: It is essential to have a full length pitch video where each member of the project starter team must introduce themselves personally to the audience. A smaller or trailer version of this video cannot be used and this needs to be uploaded at the very beginning of the funding process.
- Use of the Startnext Logo: Startnext provides its logos for use by starters with some brand guidelines. The use of this logo on related material is aimed at increasing the reach of crowdfunding and create word of mouth publicity.
Mistakes to Avoid
There are several actions that can be avoided to ensure a more successful campaign on Startnext. One key element that can make a huge difference to success is to inculcate the right emotions into a project campaign. According to the Startnext founders, the initial campaigns that they received were accurate and fulfilled all necessary criteria set forward by the website in its guidelines. But what they lacked was the ability to inspire and engage the audience. It is necessary to generate enthusiasm within the crowd and communicate the team’s own enthusiasm to ensure that people are interested enough to donate to the project in question.
Another key mistake to avoid is to provide supporters with some budgeting details so that they know where their money will be spent. This will ensure that the required amount for the project is set as a goal and remains justifiable to donors given the nature of the project.
STARTNEXT SUCCESS STORIES
Some successfully funded Startnext projects include:
The project aims to provide a fair online marketplace that is free of incorrect practices and corruption. The project goal was set at 100,000 Euros with a minimum amount set at 50,000 Euros. The project managed to raise a little over 200,000 Euros through 847 supporters. The project was listed by Bastian Neumann, the Co-CEO. The project clearly listed what the money would be used for in stages and described project goals, aims and hopes. The team is listed and introduced. The successful project is now in its second round of funding on Startnext. This project was listed under the category, community.
This project was listed with a tagline of “taste the waste” and aims to create an internet based platform where individuals, retailers and producers can offer any surplus food for free. There is also a provision to cook together to share surplus food with others rather than it being thrown away. The project goal was to reduce food wastage by German households which is worth about 22 billion Euros annually. The project funding goal was set at 10,000 Euros and the project was successfully funded with a little over 11,000 Euros. The project page provides details of how the funds will be utilized and provides contact information for a designated person from the project team to answer any questions.
Some of the rewards offered for donations include a high five, a signed movie poster, a discounted ebook, a secret recipe sandwich spread, a branded t-shirt, a certificate of honor and a VIP invite to an event.
Another successfully funded project that managed to achieve donations beyond its target is iCrane. The project is supposedly the world’s best value for money professional camera crane. It is meant for recordings with both video and film cameras, DSLRs as well as any handheld camera device such as an iPhone or other smaller gadgets. The project achieved a little over 100,000 Euros in funding over its target of 20,000 Euros. The project page mentions details such as target audience and camera crane specifications. The project was listed by the inventor and filmmaker Carsten Waldeck and his team in collaboration with the manufacturer COBRA CRANE. The project is listed in the invention category and some of the rewards offered include the option to borrow a crane, an extension kit for the crane, weigh bag for the crane, an iPad holder, a backpack carrying case, a discounted crane for a limited number of users and a complete kit for the highest donated amount.