Some industry insiders don't see what all the complaining is about. The success of celebrity projects doesn't detract from projects by lesser-known artists. In fact, critics quick to pounce on potential abuses of crowdfunding might do well to look at the history of how independent filmmakers have traditionally raised money in the past. "The typical way to fund indie films," said Janet Pierson, head of the South by Southwest Film Festival, "is that you asked your mother, your dentist, someone you knew––your network."
While SXSW does not keep numbers of how many festival films have been financed by crowdfunding, industry sources say that number has now moved well into triple digits.
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Indie icon Spike Lee was one of the filmmakers that Brunetti publicly took to task at SXSW as an example of a celebrity unnecessarily using crowdfunding. Pierson, though, pointed out that it is precisely the kind of independent films such as Lee's that have historically relied upon grassroots fundraising methods.
Lee's "She's Gotta Have It" is one such film. A now-classic indie feature released in 1986 by the then-unknown 29-year-old director, the film's budget came in at $175,000. "My husband and I invested in that film," Pierson recalled fondly.
The crowdfunding trend continues to break financial records. This month the Kickstarter campaign for a new high-quality digital music service made news not only by ripping through its original $800,000 goal in 10 hours but by exceeding it for a nearly unprecedented total of $6.2 million in pledges.
The genius behind the campaign? Rather than a millennial version of Steve Jobs, it is none other than venerated rock icon Neil Young, who joined Crosby, Stills & Nash more than 30 years before the quintessential digital listening device, the iPod, was first unveiled.
The kind of entrepreneurial hustle long shown by artists could be likened to an offline version of today's crowdfunding. "The pool of funding is not finite. Everybody harnesses their own network," Pierson said. "It's a healthy, wonderful system. Why not let fans participate?"
In the case of Shaquille O'Neal's new video game, fans can rest easy, but not too easy: They have a few days left to participate in launching Shaq-Fu: A Legend Reborn. With a deadline of one minute before midnight on May 5, the clock––which Mr. O'Neal has been known to beat in the past with a resounding dunk shot in the last few seconds of the game––is ticking.
—Crowdfunding is a very inexpensive way to revise and refine a new business plan: You can brainstorm and tweak your original idea with input from a broad group of interested parties. It's also a form of community-based business risk management.
—Crowdfunding online may be new, but in fact, it's been a traditional source of capital for many small-business owners: It's called building and leveraging a network.