Crowdfunding already had something of a shabby reputation – and that was before funding sites began stealing their customers’ money.

Pledge Music, one of the most widely used Kickstarter clones which is targeted at helping musicians raise money, was caught short of funds and dipping into their artists’ kitty. In response to claims that artists couldn’t withdraw funds raised from fans on the platform, the company admitted they had run short of cash and hoped to raise money (to replace the money they had no right to spend) from outside investors within 90 days. In response to an exodus from the platform, the founder of the company returned and advised that all future funds would be deposited with a third party so Pledge Music wouldn’t feel tempted to spend it.

User agreements (those things you click “OK” on without reading) are what they are, but many of the things listed above skirt or cross the line of legality. People do jail time for shit like this. With a reputation already hovering somewhere between a scam, “e-begging” and “hipster welfare,” Pledge Music (reputedly on the verge of bankruptcy, and it’s hard to believe anyone would want to buy the assets of a broke grifter) gave crowdfunding yet another black eye.


Banks or Record Companies: Pick One.

Despite all of that, I still think crowdfunding for musicians is a pretty good idea, and it’s not going anywhere. Quite a few great albums I own (here’s one and here’s another and a third) would have never been made without early funding from fans. Crowdfunding campaigns are in part a simple mechanism for publicity and pre-orders, and in part loans for people who normally can’t get loans. In some ways, given the realities of the industry and the difficulty in returning a solid profit on recorded music, crowdfunding may even be a necessity now. Passing a hat among your friends and fans and giving them a finished product a few months later is about all there is that is keeping whole sectors of the recorded music industry afloat.

They’re loans for people who normally can’t get loans. Given the realities of the industry and the difficulty in returning a solid profit on recorded music, crowdfunding may even be a necessity now for certain kinds of records.

Many people, however, still think of it as a form of entitled panhandling, which isn’t entirely unfair when you take in the amount of GoFundMe campaigns launched for trivial reasons. Everyone it seems has a friend that’s tried to get themselves some of that sweet “hipster welfare” by pushing a terrible idea (or two, or ten) by crowdfunding. But when it comes to the arts, crowdfunding has matured to the point where even well-funded or self-funded projects incorporate a form of crowdfunding before the product is deliverable into their business plans.

What can I really say in defense of crowdfunding at this point? Well, given that the platform you use doesn’t steal your money, artists and labels are using it for a wide variety of functions, including:

Extending Existing Projects. Most music crowdsourcing projects are about raising funds for costs that are payable immediately but take awhile to recoup – things like studio time.

But it’s also used extensively to extend existing projects, like taking a digital album and pressing it to vinyl or releasing it on CD or cassette. There are even vinyl-specific crowdfunding platforms like DiggersFactory, Vinylised and Qrates – “vinylsourcing” platforms that are specifically aimed at matching up artists and labels with prospective vinyl buyers who pre-order and get a record pressed if enough other people are interested. With Bandcamp joining the fray and the capacity of vinyl manufacturing on a (rather dramatic) upswing, we might even see the costs begin to come down and make this even easier than before.

Pre-Ordering. There really isn’t an easier way to accept orders for a product that doesn’t exist yet. Many and maybe most crowdfunding projects for musicians are really thinly disguised pre-order shopping carts. I’ve done the math and with a Shopify account you can set up a pre-order mechanism on your own and pocket a little more money than using a crowdfunding platform, but you’re also going to be handling record keeping and tech support. (Nobody ever budgets for record keeping and tech support.) It’s a lot easier to upload your shit, make a corny video and introduce “reward” tiers.

Slinging Merch. That’s the other thing. Is there a better way to drum up sales for t-shirts than as a crowdfunding reward? Everyone wants to sell their shirts and nobody really needs to buy them. Wrapping them up as part of an exciting album launch is a pretty good way to move product.

Generating Hype. This is one of the most sophisticated uses of crowdfunding pioneered by tech companies and movie studios and one I see few independent or DIY artists use. Their primary goal with crowdfunding is to generate publicity and make a campaign go viral even though they probably don’t really need the money.

Here’s an example of what I mean. A friend of mine’s dad is a hardware engineer, and was advised by one of his investors to budget 10% of his revenue from a successful Kickstarter campaign. When said dad wondered why an investor was telling him to go out and beg for money from the public, he was told that they weren’t using Kickstarter for the money but to generate buzz among websites, blogs and on social media for the gaming controller he had created.

“Man Invents Gaming Controller You Can’t Buy Yet” isn’t a headline you’ll ever see in media; “Man Uses Kickstarter To Fund Revolutionary Gaming Controller” was however picked up by a dozen outfits. They got $10,000 in pre-orders and a lot more than that in free advertising.


Crowdfunding The Right Way (There Is No Easy Way.)

Crowdfunding is always going to be defined by its most and least successful examples. For every multi-million dollar Pebble watch (which wound up being liquidated a few years later for half the money the kickstarter raised) there are a thousand bad ideas or poorly executed ones that wind up the target of jokes.

“A thousand” is probably an underestimation. Hardly a week goes by that I don’t see a horrible idea enter my inbox – usually from a well-meaning person who just doesn’t understand how this thing works or how setting a $30,000 goal for the making of a one-man techno album looks to the world. After asking some of my friends who have used crowdfunding for their music in the past (including – knock on wood – Pledge Music), here’s some of the lessons they learned and advice they have. (“Make sure they don’t steal your fucking money” is, again, a given.)

Get Realistic. Don’t get greedy and set astronomical goals that make people roll their eyes, like that $30,000 to make a one-man techno album (a real, and recent, example). People can do the math and they will.

There is also a complex formula for figuring out how much you can reasonably expect to raise for a musical project based upon the number of fans you already have. Crowdfunding anything is dicey if you have less than 5,000 fans on whatever social media platform we’re talking about (unless you’re the type of artist who eschews that shit altogether but still has widespread name recognition from before the dawn of social media).

If you need $30,000 in cash to stay on tour, you either need to stay in cheaper hotels or you don’t fucking belong on tour.

This goes to the “free advertising” bit above: “DJ You Haven’t Heard Of Starts Kickstarter for Album You Won’t Buy” isn’t a headline you’ll read outside of The Onion.

Do It For The Right Reasons. Funding a tour is your problem, not your fans, but someone opened a Kickstarter just for that, assigned a $30,000 goal and sent it out.

If you need that much cash to stay on tour, you either need to stay in cheaper hotels or you don’t belong on tour. Or in videos. Another artist wanted $15,000 to make a music video for a track nobody ever heard of. He actually had a great idea for it, but it’s the kind of thing that you’d expect a struggling artist would shoot on his weekend with some friends. He got two donors and ten bucks.

Get The Math Right. Sometimes the worst thing that can happen is success. Most DJs aren’t econ majors and have no idea about concepts like “minimum viable product.” Most Kickstarter budgets have huge gray areas which are filled with estimates likely pulled out of the creator’s ass. They usually do remember that the platform gets a cut of every dollar raised, but fail to research how much things actually cost. Call the studio you want to use to get accurate numbers, and cost every bit of the reward packages you are promising to ship out – including shipping. Shipping will sometimes be your largest budget item and everyone thinks they’re Amazon and can ship everything for free. You can’t. The boxes to ship vinyl aren’t free either, and nor is the cost of replacing records broken in transit or simply lost.

Also, keep in mind that there is a right budget for every project. The one-man techno album that could be made for $30,000 could also be made for $5,000 – and has a much better shot at being funded as a small, more compact project. No, you won’t be able to afford the 360 cameras for shooting exciting behind the scenes footage of where “the magic” happens (i.e., furrowing your brow while staring silently at a laptop screen and clicking a mouse button over and over again). No, you didn’t need it anyway.

Show Some Skin. A project that dies because it just fell short of the line to becoming fully funded on Kickstarter is pretty sad. There is no rule that an album has to be totally funded by crowdfunding. Often people will actually be more willing to contribute if they see that 50% (or more) of the budget comes from your own money. It shows you have some skin in the game and gives them confidence that you are actually doing this and not just sitting on your couch stoned and waiting for people to give you money before you start working.

If you’re putting your own money and resources into a project, factor that in and tell the people in the crowdfunding pitch.

Draft Before You Publish. Have someone with a critical eye look over your plans before you go public. What seems realistic in your late night fantasies might be weird and bizarre to everyone else. For one thing, the habit of splitting the world between “fans” and “creators” leads to some really cringeworthy moments.

I got one crowdsourcing pitch and cringed hard at the reward tiers. For $100, the musician promised he would follow you on Twitter. I don’t think he meant to look like an asshole, but sometimes you look like an asshole anyway.

Crowdsourcing Is Actually Work. I’d love to be one of those guys who posts something and everyone tells me it’s amazing and offers me cash for the miracle of my existence. These Beautiful People exist, but I’m not one of them and neither are you.

The one thing that I’ve heard from people who successfully crowdfunded albums is that it’s hard. It’s work, and it’s hard work. You worry how things look. You worry that you’re posting too little about it. You worry that you’re posting too much. You worry about if it doesn’t get funded. You worry about if it does. And rather than one investor you have 1,000 investors to manage, and they come in every type. Some won’t care that neon-green colored vinyl records they were promised turned out to be impossible to manufacture. Some will be ready to call the police for fraud over it. And you can’t give them a 1-800 number to call for customer service, because the customer service representative that ultimately answers the phone will still be you.

“You go into it thinking the REAL work is the music and [crowdfunding] just lets that happen, but it doesn’t,” a friend who funded a project on Pledge Music told me. “The music is the fun part. The sales is the job.”


  1. […] As we wrote yesterday, people frequently go to jail for what appears to have happened at PledgeMusic – misappropriating funds raised for one specific purpose and using them for another. PledgeMusic admitted they had dipped into artists’ funds. This is illegal in practically every instance I can imagine. […]

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