On March 4, I call Brad Powell, the man behind Microfundo.com.
Brad: “Microfundo.com is crowd funding for musicians. Music from everywhere. Music from all over the world. That’s our focus. The idea is to help talented artists engage with a fan base that would like their music if they only knew about it.
“We work with artists from different backgrounds and enable them to meet and engage with and develop relationships with fans who are interested in their music and in supporting their career.
“Crowd funding has recently become popular. The models out there are well known such as KIVA (micro-financing online for entrepreneurs in developing countries). People seeking this funding often get money raised for them within 24 hours. KIVA is transferring a million or two each week using this method.
“A similar model has become popular with an organization called KickStarter.”
According to KickStarter, “We’re the largest funding platform for creative projects in the world.”
Brad: “They’re doing something like $5 million a month.
“So this is a model that’s been proven in the past couple of years. Microfundo.com is not the same as either of these models. KIVA and KickStarter don’t allow for building a long-term relationship between the person receiving the funding and the person giving the funding. In both cases, the model is project oriented and it’s a single project. You put up your money and you’re done.
“From my experience, particularly working in the non-profit sector, fundraising has always been about relationship building. From things like passing the collection plate on Sunday in church, you’re doing it frequently and often and for your entire life. This is the ideal relationship you want to build.
“Microfundo.com can help musicians find a core group of fans who adore what you’re doing and will be there for whatever you’re doing, be it a live show or a new recording. They’re going to be coming back to you.
“Examples of how this has worked in the past include the music group the Grateful Dead, which was successful creating a large and loyal following who were called ‘Deadheads’. They would come to many concerts. These were dedicated fans. This is the kind of relationship an artist wants to have and the kind of relationship-building Microfundo.com wants to build for musicians.”
“I was promoting shows and putting on performances and I was working with a number of talented musicians and all of them seemed to have the same issue — there seemed to be a low ceiling. I wanted to do something to help them connect with their audience in a larger way.”
“My first foray into solving this problem via the internet was through the music service Calabash Music. It was like iTunes but it was for international musicians. It enabled you to find music you wouldn’t find any other way.
“I started learning about online micro-finance and got inspired by some of the other online methods of doing micro-finance.”
“The whole crowd sourcing movement is about allowing average people to do stuff that was previously beyond their means. I can find out about a group on the other side of the country and bring them to my town and make a concert happen. I can develop a music scene where I live.”
“We’re doing a micro-investment offering. I’m working with an investment banker on Wall Street who used to be a musician in a rock band. Anyone who wants to micro-invest in Microfundo.com and they’ll get a percentage of the revenue we earn over the next two years. This could bring crowd-funding to Wall Street.”
“We’re focusing on the one-day exclusive sale popularized by sites such as GroupOn. We’ll work with artists who want to do a live performance and we’ll promote it by making an offer of an exclusive recording by the artist that is available for only one day for just $1.
“When people come to the site for the deal, we’ll be promoting other items which will include tickets to the show sold in different ways, backstage passes, etc. The place where artists make money is the live show. In this model, the music is used to promote the live show and the proceeds from these $1 sales will go to a local youth dance and music program.”
“I’m a big music fan so through this I get to have an idyllic super-fan life. I get to meet artists and build a personal relationship with some of them and I get to go when they perform and hang with them. I’m embedded in this music scene of my own making (and others’ making).”