The Kickstarter Handbook Part 5

The reasons for the failures are diverse, but certain themes are repeated: Thinking that Kickstarter is a bizarro-world moneyland where you can get free cash for little effort. A lack of commitment to pressing acquaintances for backing. Reluctance to seek publicity. Having too little support lined up before launching a campaign. Poor presentation of the project, with a sloppy video or unfocused campaign page. Or, hey, just an idea that stinks or whose time has not yet come.

In the end, Kickstarter failure is all relative. The design firm Swarm failed in its first campaign for its Nectar and Elixir bicycle seat clamp/bottle openers. Their second try was a Kickstarter success but became a real-life failure, losing money and showing that the products themselves were not financially viable. In the big picture, however, the experience was a larger success, garnering valuable attention for the start-up design firm, quickly and at a low cost. Another case in point: a 2012 Kickstarter project called graFighters failed miserably, raising just $3,049 of its $20,000 goal. But the online game-which lets anyone upload a hand-drawn character and set it to battle against other people's doodles and ill.u.s.trations-was pretty cool. So cool, in fact, that David Chenell and his cocreator Eric Cleckner, fresh off the Kickstarter defeat, were offered $200,000 from a venture capital firm. You never know what failure will bring.

As you think about launching your own Kickstarter effort, hearing what didn't work can be as helpful as gathering winning strategies. So, here are several campaigns that didn't succeed, with words of wisdom from the people behind those efforts. Also included are the voices of some creators who failed, retooled their idea, and then succeeded in their return engagements on Kickstarter.

These are their stories.

A Question of Ethics Podcast Series with

Randy Cohen

Kickstarter goal: $25,000 Raised: $7,420 For twelve years, Randy Cohen was "The Ethicist" columnist in the New York Times Magazine, the Sunday publication of one of the most widely read newspapers in the United States. In his popular column, Cohen took questions from people dealing with ethical conundrums and helped them figure out how to behave. In 2011 he thought he'd expand his ethical expertise into a weekly, ten-minute podcast. To make it happen, he set out to raise $25,000 on Kickstarter. But despite his national prominence and media connections, Cohen's campaign raised less than $8,000, and he abandoned the podcast plan. He's now doing a non-ethics-focused public radio show called "Person Place Thing" and continues to provide moral support with his book Be Good: How to Navigate the Ethics of Everything.

So what happened with your Kickstarter campaign?

Cohen: We didn't hit our funding goal, but it's like being in a car accident, you know? There's an element of shame involved in it. I'm embarra.s.sed. It was kind of public failure, and I feel slightly humiliated. But then you kind of feel your bones, like after an accident, to see if anything's broken. And I was pleased to find that I came out OK and really admire Kickstarter nonetheless. What they're doing is incredibly great. And I say this from the point of view of an abject failure.

What was your introduction to Kickstarter?

Cohen: I had met [Kickstarter cofounder] Perry Chen years ago, and he was talking about this idea where people would just give other people money for creative ideas. I remember thinking: This kid is so bright and so nice, and so wrong about everything. This thing is doomed for failure. People aren't just going to give their money away. Seldom does life let you be so unambiguously wrong. I was totally wrong, and he was utterly right.

Do you think your failure was about tactics or your overall idea?

Cohen: That's been hard to sort out. Sometimes the obvious explanation, however depressing and demoralizing to me personally, might be the correct one. And it's that maybe I wasn't nearly as popular as I thought. That could be the explanation. Given the chance to encourage me on the fine work I was doing, people said, "Eee, maybe not."

But that can't be true. Your column was hugely popular, in a magazine with a giant readership, right?

Cohen: Well, I do know this, and it sounds sort of braggy to mention it, but the New York Times Magazine has two million readers. I think it has a million subscribers, and there's some formula they use to calculate pa.s.s-along reads. And I know, because my powerful overlords told me repeatedly, that I was the most-read feature in the magazine. Of course, people might have read it with their fists clenched. But I know the column found readers. One explanation I considered is that maybe they're two separate audiences. Maybe the Times readership tends to skew a little bit older. I always imagine Kickstarter as skewing a little bit younger. So maybe they're two different groups.

Do you think your fund-raising target hampered your success?

Cohen: It did strike me that, for the kind of project we were doing, maybe we were aiming a little high. We raised $7,420. We were shooting for $25,000. And maybe that's too much for podcasts. Maybe the Kickstarter users are savvy about podcasts and think you should be able to do them for less money. Our task was to fund three months' worth of weekly podcasts, and the people I was working with were radio guys, radio producers who had a background in commercial radio. They were working on a budget in that context, with the idea of something highly produced. I though their ideas were good, but maybe that elaborate production, that works terrific as a show, for a podcast maybe it's a little excessive.

Do you think there was an issue with your rewards?

Cohen: I thought our rewards were pretty good. For the $250 pledge, the premium was "you be the announcer" in a podcast episode. We had three people choose that. And for the $500 level, it was "two drinks, two dilemmas." I'd meet with you and do a one-on-one private consultation. It seemed in-line with what other people were doing for similar projects. I know Kickstarter has done particularly well with design projects-where the reward you get is the thing itself. An early success was that beautifully designed watchband that turns your iPod nano into a wrist.w.a.tch. We didn't have anything quite like that.

Do you think your video was too funny?

Cohen: I've been accused of the opposite! I tried to catch the tone of "The Ethicist" column but show how that might evolve a bit as a podcast. It was more explicitly funny than the column, but not by much. It wasn't that funny.

It was whimsical, and I wonder if people translated that as a lack of commitment? I wonder if potential backers can see the video and sense how much you really want it?

Cohen: Maybe you're crediting Kickstarter potential donors as having more psychological insight here than I would have figured. And I think maybe you're right. I was a little ambivalent about it going in. I had started working on a radio-show idea when I was still writing the column, and I had no idea that there was going to be a new editor taking over the magazine and firing me. But once that happened, by the time we got to the podcast and Kickstarter, I wasn't quite sure what to do next. Did I want to continue in the ethics biz? I had mixed feelings: it was a wonderful job, but maybe it was time to move on to other things. Maybe that came through.

Was there a point in the campaign where you weren't getting traction and sort of threw in the towel?

Cohen: No, no. At first I thought, well, I have to get the word out more effectively. At that point, I was no longer writing the column. So there's Facebook. I think some of my readers came over and liked my public figure page on Facebook. I tried to let people know. That was part of the process I never enjoyed, because it felt too much like begging your friends for money. Even to tell them about it. I wish there were a feature of Kickstarter that insulated you from that, that you were not permitted-this would be unenforceable-but it should be a guideline: you can't give money to anyone you know. You can define "know" as strictly as you wish. Do I have their home phone number? Have I had dinner at their house? Have I seen them naked? The same way you can't review a friend's book. And that would free me-because I wanted friends to tell other people about it. But I didn't at all like even telling my friends I was doing this, because it seemed like I was. .h.i.tting them up for money. If Kickstarter incorporated that rule, the "no giving to close friends" rule, then I could tell everyone. Very few of my backers were close friends. It was more gratifying when strangers did it, because it sort of announced that they like your work.

Given your media connections, were you able to get good press?

Cohen: No, I don't think so. We might have had a little. Right, I suppose one mention by Oprah would do it! You know, you do this completely fallacious math, built on completely false premises: If only one out of every thousand Oprah watchers, or people who read the column, just gave two dollars! But that's just kidding-yourself math. We were never the featured project on Kickstarter, but they did write something about us on the blog. We couldn't have asked more from them. We really failed on our merits.

Do you think that, despite what you just said, if you had really, really wanted it, you could have made it work? If you were willing to ask friends for money, grovel for press, whatever it took?

Cohen: Yeah, maybe. Maybe that's true about almost any project. To really, really want the thing and be willing to do whatever it takes, whether or not some of those activities are unpalatable. Maybe I didn't do some things I might have done. I'm really enjoying my new radio show "Person Place Thing" on public radio. I would grovel for that. I would like to take it weekly and go national as soon as we can. Perhaps if I went on Kickstarter! And this time. . . I'll get it right.

Dreaming In Stainless Kickstarter goal: $25,000 raised: $215 There have been, surprisingly, two different campaigns on Kickstarter to make doc.u.mentary films about the legendary DeLorean automobile (you know, the futuristic stainless steel car with spread-eagle doors that was a star of sorts in the 1985 movie Back to the Future). One of the campaigns successfully hit its goal of $5,000, and the film (called Back to the DeLorean on Kickstarter and now DeLorean: Living the Dream on IMDB.com) went into production. Craig Werner's effort to raise $25,000 to make Dreaming in Stainless, a doc.u.mentary about DeLorean owners, withered with just $215 pledged. We asked Werner what happened.

What do you think went wrong?

Werner: My feeling is that, taking a project to Kickstarter, you had better have a lot of support already, which this idea really didn't have. To gain momentum, you really have to have something in your pocket that you can take to it immediately. It picks up momentum, and then you're going to get more exposure through Kickstarter, because they like to promote successful projects.

How much work did you do to get attention for the campaign?

Werner: I sent a copy of the promo video to Jay Leno [knowing that Leno collects cars]. And about a week later I got a phone call from him and we chatted. It was fun to talk to Jay Leno. But he wasn't interested. That took a bit of wind out of my sails. It would have been huge. It would have made all the difference in the world.

We did the campaign for sixty days, and for about the first thirty days I held hope it would be "discovered." About two or three weeks before it expired, I was pretty well discouraged. I contacted directly for support all the members of the local DeLorean owners club, as well as those all across the globe, and in fact most of the money pledged came from owners.

Early in the campaign, you got a comment from a user with some advice about tweaking your video and the rewards levels, that maybe $35 for a DVD was too high. Were those a problem?

Werner: I don't think so. I've seen other projects that have had minimal rewards and done well. I really believe it's all about getting there with momentum ready to roll at the time you launch.

Acapelladiva's Opera Debut Phoenix CD Alb.u.m Kickstarter goal: $20,000 Raised: $6,595 Acapelladiva: Aurora Arias CD Kickstarter goal: $3,000 Raised: $4,005 Julie Brown has a strong, soaring voice and a background in cla.s.sic opera, giving her a unique place in the rich music scene of Austin, Texas. In September 2011, after years performing locally and giving voice lessons, she decided to go for it and try to record her own CD. She pulled together a creative Kickstarter campaign, with rewards that included copies of her music, a private concert, and the "Texas cowgirl outfit" she wore for a performance at the Texas state capitol. Her campaign fell short. Then she regrouped, tried again, and succeeded.

What did you learn from the first campaign that you fixed the second time?

Brown: I'd gotten so excited, wanting to do it really big. I wanted to sing with an orchestra. I researched it and, to hire the smallest orchestra, the cost was anywhere from $20,000 to $200,000. The second time I downscaled it. I thought, the thing that's important is my voice. So I downscaled it to just piano and voice. It's not a huge thing, not thousands and thousands of CDs. I'm probably gonna make 500 copies. It's a marketing tool, to at least get my voice out there. Now I plan to get out and do more live performances.

So, it was that simple. It's still worth doing, even scaled down?

Brown: It's really easy for artists to think, I didn't make it, I'm gonna give up. But just rethink it. Do it on a smaller scale. You can be successful.

Nectar and Elixir a bike seat clamp / bottle openers March 2011 Kickstarter goal: $15,000 Raised: $1,291 Nectar and Elixir a seat clamp / bottle openers April 2011 Kickstarter goal: $2,500 Raised: $4,403 The partners at Swarm, a design firm in Park City, Utah, had to try twice to find the winning Kickstarter formula for their innovative bicycle-seat clamps that function as handy-dandy bottle openers. After their first try crashed, falling way short of attracting $15,000, they tried again just weeks later, asking for a mere $2,500. In the "About This Project" text for the second try, they began "Hey Kickstarters! Thanks for stopping by and checking out round 2 of our Nectar and Elixir project. We've done some serious renegotiation, and dropped our goal by over 80%. This time you can be sure that Project Seat Clamp is go for launch!" They also shot an entirely new video, containing more cycling action and a preamble explaining what they were calling their "relaunch": "Turns out that our previous goal was a little bit too steep . . . but the great thing about Kickstarter is, through the whole process, we've actually made some great contacts. We've met some domestic manufacturers, we met some distribution guys . . . these guys were able to work with us more, and we're able to work with a much lower goal."

The result: asking for much less, they got much more. They raised $4,403 the second time around. And by mid-2011, they had the cool clamps manufactured and shipped to thirsty cyclists worldwide.

What do you think went wrong the first time?

Garrett: The product was very niche. We were aware of that from the outset. We did feel like we'd get a little bit better response than we did in the first round, but what we learned was that just to be on Kickstarter was not nearly enough. It gets lost. Kickstarter had so many products, and now it has even more. Even then, we were getting lost. We were a smaller product without a whole lot of reach. On the first try we just weren't well connected.

On the second try we were able to use all the connections we made with the first attempt. So we connected with those people again. Most of those people rolled over; about 80 percent repledged. At that point we needed to double that number from new people. We kept a list of people who were doing Kickstarter updates on blogs, any Web portal that was reposting. Anything.

In lowering your fund-raising target, how much did you have to scale back your goals?

Garrett: We just lost a lot more money! The plan was to get the Kickstarter campaign to pay for tooling. And in that sense it worked. So we were just trying to reach a certain amount of money to pay for tooling so we could take the product from that point to whatever sales channels we planned to go into. And what we learned is that we were never going to be able to produce this product at a compet.i.tive rate unless we sold it direct. Then we still were not going to be able to make any money, so we killed it.

We realized from the outset that it's just a cool product, and we didn't expect it to sell huge numbers. We were hoping we would get more buy-in than we did, but we look at it as a promotion for our business, which is product design. And it worked. We had a lot of people contact us because of Kickstarter. We picked up at least two projects.

So, for you, Kickstarter was about free marketing more than this particular product?

Garrett: Yeah, it's an inexpensive way to get a lot of people to look at our products and our design company. Our company has been in existence for eight months. We formed the company and then saw that it's difficult to get the word out unless you have a big database, which we didn't. So we thought: what's the best way to enter the market? And that is to get products onto the market. Have people come to our website and learn more about the company.

In a way, it kind of kick-started your company . . .

Garrett: That's the way we look at it.

KICKSTARTER ISN'T THE ONLY crowdfunding site on the Internet and certainly not the single resource that can help artists, entrepreneurs, and inventors who seek funding. Kickstarter's success, of course, has sp.a.w.ned imitation, homage, and general riffing on the concept. Several direct alternatives exist on the Web. Some approach project fund-raising differently. Others can supplement a Kickstarter campaign, such as facilities that offer a.s.sistance with rapid prototyping of a product concept or organizations that can help you work through the details of becoming a nonprofit. Some are aimed at businesses looking to get started. Others are more specifically for musicians or filmmakers.

If you're shopping around, here is a selection of the many diverse sites along with ideas that will get you thinking. For the latest links and news about various resources, follow @crowdfunding on Twitter (unaffiliated with this book or with Kickstarter).

For more information about any of the sites listed below-none are affiliated with this book-go to the URLs provided and read the FAQ or About pages. This list is representative and not an endors.e.m.e.nt of any particular sites. Keep in mind that the Web is constantly changing. Sites come and go, and their missions may evolve.

A Little Like Kickstarter ArtSpire artspire.org Artists must apply to this program of the New York Foundation for the Arts, which offers its "fiscally sponsored" artists a way to affiliate with 501(c)(3) tax-exempt organizations. Doing so allows artists to accept tax-deductible contributions and apply for grants that are usually restricted to nonprofits.

Crowdtilt crowdtilt.com They call what happens here group-funding rather than crowdfunding. In crowdfunding, many people fund an individual's project; in group-funding, a group pools money to fund an objective that benefits the entire group. Unlike Kickstarter, Crowdtilt can be used to throw a party or help someone with medical bills.

Feed the Muse feedthemuse.net A sort of Kickstarter clone, dominated by music projects, that doesn't have all-or-nothing funding thresholds.

IndieGoGo indiegogo.com IndieGoGo is a lot like Kickstarter; some have even called it a clone. The biggest difference is that, in seeking funds, you're not forced into an all-or-nothing system. If you're out to get $10,000 and you get $8,500, you can keep the $8,500. The company started in 2008 with a fixed funding model (all-or-nothing, like Kickstarter) but then moved away from it; it now offers both fixed funding and flexible funding. The fixed funding option has been used by many IndieGoGo project creators who need a minimum amount of money to follow through with their projects. As in Kickstarter, the deadline and threshold add a sense of urgency that you lose going the flexible funding route. According to IndieGoGo, flexible funding is ideal for projects that you can break into smaller goals or for which you have other funding sources.

RocketHub rockethub.com RocketHub matches "creatives" with "fuelers." They don't have thirteen creative categories, as Kickstarter does, but they do have tags that can be a.s.signed to projects, like "freaky" or "nostalgia" or "s.e.xy." It, too, is an all-or-nothing funding system, but RocketHub takes pledged money right away, via credit card or PayPal, instead of waiting until the end of a successful campaign. If a campaign doesn't meet its goal, pledge money is put into a pledger's RocketHub account. From there, the pledger can get the cash back, but many choose to use it to fund other projects.

USA Projects usaprojects.org A nonprofit that "connects people with great artists and helps them to make tax-deductible contributions to projects in the performing, visual, media, and literary arts." Before being accepted, an artist must have the blessing of "one of [the site's] partners or recognized organizations," which include hundreds of foundations, corporations, and arts organizations across the United States.

Not-for-Profit-y CrowdRise crowdrise.com Crowdrise is for charitable causes and volunteer efforts, two types of fund-raising activities that are explicitly excluded from Kickstarter. You can raise money by receiving pledges to run in a marathon, volunteer on weekends, or anything else that might inspire donations. Money goes to a charity you choose. The charities on CrowdRise are U.S.-based, 501(c)(3) nonprofits.

Fractured Atlas fracturedatlas.org Fractured Atlas is a nonprofit that offers a range of services to starving-artist types. Services include access to funding and health insurance. The site lists many film, dance, theater, visual arts, and other projects, and donors can make a tax-deductible contribution to Fractured Atlas earmarked for a particular effort. Members pay $95 a year.

Fundly fundly.com Fundly is a fund-raising platform for nonprofits, do-gooders, and others in need. It has funded projects by big organizations like Habitat for Humanity, Boys and Girls Clubs, and Teach for America but also by individuals to raise money for trips, to help with postdisaster recovery, and to defray costs during health crises. Also included are religious groups and political campaigns. Meg Whitman used Fundly to raise $20 million for her 2010 campaign for California governor.

Start Some Good startsomegood.com SSG is for social-change initiatives, "empowering people from around the world to become social innovators." Site organizers don't limit it to tax-deductible charities. The categories include "citizenship," "human rights," and "environment." A recent example: the "Cost of Freedom Voter ID App," designed to "cut through the confusion and quickly provide citizens with information on how to apply for a photo ID which they must show in order to vote."

YouHelp youhelp.at Available only in German-speaking countries but with plans to spread, this Austrian start-up is applying the crowdfunding model to nongovernmental organizations that offer international a.s.sistance.

More Music-y ArtistShare artistshare.com ArtistShare calls itself a fan-funding site. Since 2003 it has allowed "fans to show appreciation for their favorite artists by funding their projects in exchange for access to the creative process." That means access to recording sessions, limited-edition recordings, and acknowledgment in liner notes. It's not an open platform for all musicians, however. You need to apply and be accepted.

Hifidelics hifidelics.com Hifidelics lets musicians raise money to create limited-edition releases (500 copies maximum) of alb.u.ms on vinyl. If a project gets enough funding, the company will make the LP and sell it. There are no fees to use Hifidelics. If a project is successful, the musicians get 60 percent of all sales after production costs are covered.

PledgeMusic pledgemusic.com PledgeMusic is a Kickstarter-ish site just for music. It helps artists and bands "design a specifically tailored fund-raising campaign to raise money for their next release." As in Kickstarter, funds seekers invent rewards for donors, "anything from DJ-ing at your house party to attending a rehearsal, or even a movie and dinner with the band." It's also an all-or-nothing system.

Sellaband sellaband.com Sellaband is a European site where musicians can raise money to record music and go on tour. It is denominated in euros, but there are musicians from all over the world using it, including some from the United States.

Sites including Bandcamp (bandcamp.com) and TuneCore (tunecore.com) offer indie artists digital distribution of their music. In addition, ReverbNation (reverbnation.com) can help in getting gigs.

More Film-y Slated slated.com Slated is a sort of high-end dating service for filmmakers and investors. It's not made for soliciting $50 donations. The site lists feature films (budgets $500,000a$15+ million) and doc.u.mentaries with broad commercial appeal (budgets $250,000a$2 million). It's an exclusive site: anyone who applies to use it needs to be approved by two other members of the Slated community before the person's profile will be published. Investors are allowed to freely contact filmmakers, but not the other way around.

VODO.

vodo.net VODO has been described as Netflix-meets-Kickstarter for indie films. It's a peer-to-peer distribution platform for completed films (they don't store the films; you download using torrents). Users can download movies for free, and filmmakers can raise money by offering goodies around the movies in exchange for donations, like companion books, audio soundtracks. The Yes Men offered props from their film and raised $26,000.

Offbeatr offbeatr.com It was bound to happen. This start-up is trying to be a Kickstarter for makers of p.o.r.no films.

Of course, seasoned filmmakers are accustomed to applying for grants, and there are plenty of them out there, places like Cinereach (cinereach.org/grants), Rooftop Films (rooftopfilms.com/info/produce_filmfundguidelines_shorts), and the Sundance Inst.i.tute (sundance.org/programs/doc.u.mentary-fund).

More Design-y The "maker" revolution isn't so much about fund-raising as the idea that, if you have a design or product idea, you can prototype it yourself to see what it looks and feels like, and whether it really works. Facilities called "fabrication studios" and "maker cooperatives" and "hacker s.p.a.ces" continue to sprout in many cities, providing training and access to equipment including computers, 3-D printers and high-tech industrial machinery for working with electronics, metal, plastic, wood, and textiles. These facilities often require you to join as a member and take lessons so that you can safely and productively use the equipment. TechShops have "dream consultants" on staff to guide you to the right equipment. Using a facility like this can be the precursor to taking a product or art design project to a crowdfunding resource like Kickstarter, where it always pays to have a prototype to show potential backers.

Check into the expanding list of locations for TechShop (techshop.ws) and FabLabs (fab.cba.mit.edu/about/labs/). There's also NYC Resistor (nycresistor.com) in Brooklyn, NextFab Studio (nextfabstudio.com) in Philadelphia, and Phoenix Asylum (phoenixasylum.org) in Boulder, Colorado, among many others.

More Sport-y Involved Fan involvedfan.com Rather than helping artists make art, this site is where fans can help athletes finance their training and travel to tournaments. Fans can get autographed goodies, newsletters, Skype calls, and lessons. Athletes receive 80 percent of the money that is pledged to them. The site handles athlete newsletters and shipping of autographed items.

More Publishing-y Unbound unbound.co.uk Based in England and denominated in British pounds, Unbound is open to authors in the United States and other countries who want to finance the self-publishing of a book via crowdfunding. Monty Python alumnus Terry Jones used Unbound to finance a series of wacky books. The projects have predefined backer rewards packages (digital book, hardback, signed edition, goodie bag, launch party, lunch with author) at preset pledge amounts that simplify the task of thinking up prizes for backers.

Magcloud magcloud.com This isn't a crowdfunding site but a way to self-publish and sell magazines and other publications. You design your publication in a traditional print layout, with pages that readers turn, and then use the site to sell it in both digital and print versions. Magcloud, operated by a division of Hewlett Packard, will print and ship the paper versions of magazines to customers on demand.

Blurb (blurb.com), Creates.p.a.ce (creates.p.a.ce.com), Lightning Source (lightningsource.com), and Lulu (lulu.com) are among the best-known options for publishing a book on a print-on-demand basis.

More Photojournalism-y Emphas.is emphas.is Yes, there's a crowdfunding site for photojournalism. On Emphas.is, photojournalists pitch projects directly to the public and offer rewards at different pledge levels. In 2012, the site also debuted Emphas.is Books to fund the creation of photography books.

More Arts-and-Crafts-y Etsy etsy.com Not a crowdfunding site but rather a big online marketplace place where artisans can get funding for stuff they make by offering it for sale directly to consumers. It's like a giant crafts fair, with everything from handmade soaps and jewelry to a 500-gigabyte external hard drive in the casing of a Super Mario Bros Nintendo game cartridge. Items are often made on demand in response to orders, so, like Kickstarter, Etsy can minimize the need to build up a large inventory before the customers have arrived.

Overseas Options Ulule ulule.com Ulule is an international site that has crowdfunded "creative, innovative, or community-minded projects" worldwide, from record alb.u.ms to humanitarian missions.

New Jelly newjelly.com This European crowdfunding site has many of the same rules as Kickstarter; denominated in euros.

More Business-y In business, financial backers generally are looking for a piece of the action and a return on their investment. They give funds to a company as either equity or debt-an ownership piece of the company or a loan that must be repaid. Kickstarter doesn't work that way-you never sell any equity on your project, and you don't take on any debt from your backers. In fact, for decades it was illegal in the United States for a company to seek equity investment via crowdfunding from anyone but "accredited investors," which means rich people with a net worth of at least $1 million. That law was put into place in 1933 as a way to protect regular people from scams and overly risky bets. But critics said it locked start-up companies out of a way to raise capital, and it locked small investors out of a chance to get in early on breakout investments that have a lot of financial upside (along with a lot of risk). In April 2012, President Barack Obama signed the Entrepreneur Access to Capital Act, part of the bigger JOBS Act (the acronym for Jumpstart Our Business Startups), which was designed to let companies raise as much as $1 million per year from anyone, without having to do a public offering. As the Economist explained: "For the first time ordinary investors would be allowed to put up to $10,000 in small businesses that are not registered with the Securities and Exchange Commission, enabling Joe Schmo to win big if the company becomes the next Google." Online portals for equity crowdfunding are expected to spring up, but exactly how the system will be implemented, circa mid-2012, remained in the hands of government regulators. Keep an eye on developments.

Certainly, some people who are running cool projects on Kickstarter are in fact starting companies. And they may be working separately with more traditional angel and seed investors at the same time, or soon after their Kickstarter campaigns.

Meanwhile, a variety of sites can help match business ideas with possible funding. Here are some worth knowing about.

Angel List angel.co Angel List is a sort of social network for serious business startups and serious investors. Angel investors who have made multiple $25,000-plus angel investments are welcome. Startups create a profile that can be seen by investors, and they can "follow" investors. It's supposed to be a great way to get a pitch in front of a lot of rich people at once.

AppsFunder appsfunder.com AppsFunder is a Kickstarter-style site for Apple and Android app creators. You list an app and offer various rewards for different pledge amounts. Backers can get a cheap per-sales copy of the app but-here's the twist-they can pledge large sums and receive a cash slice of your earnings once your app is published on AndroidMarket or in the Apple Appstore. It's typical to offer $75 in revenue sharing for a $25 pledge.

Quirky quirky.com They call Quirky a "social product development" site. It's given birth to slick products you can now buy, like the Broom Groomer (a dustpan with plastic teeth that can extract the junk stuck in a broom) and Thor (extensible windshield ice sc.r.a.per with an X-shaped blade). The ideas come from regular people. "It's time that we make invention accessible. It's time that we invent together," says Quirky's manifesto. "A product at Quirky isn't born in the boardroom. It's born in the living room. It's born on the drive home. It's bred by people from all walks of life. People just like you."

Product ideas that are submitted are voted on and refined with ideas from the site's users, and the Quirky team helps design, spec, and prototype select products. Products that get enough presales are then produced and sold. The original inventors as well as anyone who had any input into the process gets reimbursed. "We track down to a fraction of a percentage how much input each community member had over the successful development of a product. Every time one unit of a product sells, all the people involved get paid," they explain. Like Kickstarter, it's also a place to buy unique gifts.

Accelerators, Boot Camps, and Incubators Start-up companies have options beyond crowdfunding, including the many organizations that regional groups have organized to foster economic development and those that hungry investors have established to get a piece of the next Facebook.