Putting Your Money Where Your Mouse Is

Thanksgiving is a time for contemplating our benefactors: friends, families, mentors. For independent filmmakers, that list expands as an increasing number turn to crowdfunding to raise all or part of their budget. That's as true for Austin, and its ever-growing crowd of inventive and cash-strapped directors, as it is for any other film scene.

Crowdfunding is simple: A creator uses an online platform to ask people to back their next project. The sums can range from a single buck to a down payment on a house, and the perks and rewards are similarly tiered. Yet its early years were rocky. Initially, nobody trusted the idea of throwing money at some random strangers' production. Then it became something seemingly reserved for small, independent creatives, with vitriolic backlash against celebrities like Zach Braff, who raised $3.1 million for his second feature, Wish I Was Here. Now it seems completely natural for a filmmaker to fall back on the kindness of strangers and fans. Moreover, studios are taking crowdfunded films seriously: Sony Pictures Classic acquired Don Cheadle's Miles Davis biopic, Miles Ahead, and Fox Searchlight will distribute Super Troopers II, while Dear White People was a huge success for Lions Gate.

Marc Hofstatter, head of film for fundraising platform Indiegogo, sees that development as the standard growing pains of any disruptive technology. He said, "What was HBO in the beginning? What was AMC in the beginning? It just takes time and a few strong case studies for someone to say, 'OK, this is legit, this makes sense.'"

While Kickstarter may be a bigger name in crowdfunding, Indiegogo was there first. Founded in 2008, its original focus was film production. When Hofstatter joined in 2013, he found it a welcome change from the decade he had spent in what he called "traditional film," where projects dawdle and die. His office doesn't just sit passively while the ambitious and the hopeful shake the digital collection tray, but serves as a resource to make sure they hit their target, and start shooting. He said, "This is the way I wanted to work with filmmakers at the beginning of my career, but I never really had the opportunity to do so."

For Meet Me There director Lex Lybrand, after three films and three Indiegogo campaigns, crowdfunding is key to his finances. Calling himself "essentially a glorified hobby filmmaker," he said, "I moved to Austin to make movies because I knew I could make them for as little money or as much money as I could raise." That's a practical attitude, because none of his campaigns have gotten much more than halfway to their targets. Yet the campaign total doesn't tell the whole story. His latest project – tech satire Trolls – raised $4,311 of its $20,000 goal. However, 12 hours after the campaign ended, local intellectual property specialist law practice Cesari & Reed, LLP contacted him: The partners had heard about the campaign, were interested in the script's story of patent thieves, and invested $20,000.

While critically acclaimed productions like Hellion have raised Kat Candler's profile, she still knows about hand-to-mouth filmmaking. When she started, she said, "We were having garage sales, putting together concert benefits, anything to cobble together our little productions." In 2011, she experimented with an Indiegogo campaign for the original short of "Hellion." She asked for $3,500, and ended up getting nearly $1,000 over that amount. The following year, for the more ambitious "Black Metal," she asked for $6,000, and beat that number by over $1,100. While the cash was important, equally important was the community that sprung up around her films before a frame was ever shot. Old friends came out of the woodwork to back her vision, and "Black Metal" gave her exposure to an audience that had never even heard of her film Jumping off Bridges. She said, "They were fans of metal, rather than me or what I've done."

When it comes to crowdfunding, community is everything. It's how Austin-based Rooster Teeth raised nearly $2.5 million for the upcoming Lazer Team from fans already loyal to their brand. Editor-turned-director Karen Skloss didn't expect to crowdfund the whole $300,000 for her debut narrative feature, The Honor Farm, so her $50,000 Kickstarter target "was a way to show our investors that there was an audience for the movie." Fortunately for her, the campaign pulled in $55,715, but that was just one of the campaign's benefits. She said, "Within the local film community, everybody knew about it and was asking about it. When it came time to crew up, there were a lot of people ready to sign up."

Candler, Lybrand, and Skloss all started their campaigns before shooting began. When Steven DeGennaro and his producers sought help for the upcoming Found Footage 3D, the feature was almost finished, but there was a problem: The special effects budget had tripled, and they didn't have the cash to cover the gap. So rather than just ask for abstract completion funds, DeGennaro highlighted one incomplete shot. He said, "We decided that the more specific the goal for our campaign was, the more it would resonate." Again, he felt this would build community, and a sense of ownership among the backers. He said, "When you watch the finished film, you'll be able to look at that scene and say, 'I paid for that.'"

However, that's not all they're paying for. Out of the $35,172 raised for Found Footage 3D, the production only kept around 71%, with the rest split between fulfilling the incentives and perks, and the 9% crowdfunding fee. Then there's the big difference between the leading platforms: Indiegogo lets you keep everything you raise, whereas Kickstarter requires that you hit your target, otherwise you don't get anything. Lybrand went with Indiegogo in part because he needed to retool his script to fit his eventual budget, but Skloss saw Kickstarter's all-or-nothing approach as adding a certain urgency. She said, "I definitely saw a scramble at the end from people who knew about me and cared about me."

DeGennaro saw the choice of platform as less of an issue. He said, "We wouldn't have launched the campaign if we didn't think we could make it." Conversely, if the production missed the target, then he would have "a much bigger issue than the money. We would have overestimated the demand for the movie."

That's a rough lesson to learn. Indiegogo's Hofstatter said, "You're putting your heart and your work for people to either accept or reject, and if they do reject it, there's perhaps a good reason why." However, it's important not to confuse a bad project with a bad campaign, and there's a lot more to hitting a target than just setting realistic goals and having cool perks. DeGennaro hired a PR firm to email potential backers with a countdown clock before the launch, while Skloss bought ads on movie websites. All of this takes planning. Hofstatter said, "I always make the analogy that you can't make a sandwich and eat it at the same time." Instead, he compared running a campaign to shooting a movie. He said, "You don't just say, 'Let's shoot this today.' No, you need to know what you're shooting that day. It's the same way with an Indiegogo campaign. You need to know what you're doing that day."