Funded Today is taking a radically different approach to marketing Kickstarter campaigns, giving Kickstarter backers cashback rewards for their contributions, using influencers to aggressively market the campaigns, and taking no proceeds until the campaign achieves success. Yes, you read that correctly—no proceeds until the campaign succeeds.
Zach Smith and Thomas Alvord, co-founders of Funded Today, are both marketers. As they entered the crowdfunding sphere, they repeatedly saw the issue that crowdfunding companies were too financially restricted to pay fees upfront (which was why they were crowdfunding), but that they would often go on to succeed with a little bit of help. They developed Funded Today to market for these types of clients, guaranteeing success—or the clients don’t pay.
The Funded Today service is essentially a marketing agency with a three-pronged approach tailored specifically for Kickstarter campaigns. When Funded Today takes on a campaign, their first step is to aggressively market and purchase targeted advertisements for the crowdfunding campaign using social media ads; with the pair’s extensive direct marketing expertise, they’ve perfected a strategy that results in a high click through rate, a low CPC (cost-per-click), and effectively targeted audiences.
The next step is using the press and other individuals who write about the campaigns. Funded Today has a large network of influencers that publicize campaigns and rapidly spread the word. Lastly, they have an unusual 10% cash back rewards program for all campaigns they take on, allowing backers to get a 10% cash back reward on the campaigns they take on.
The business itself is an incredibly risky proposition because Funded Today receives no money upfront with their clients, requiring them to screen the campaigns that they take on. They use a complicated algorithm developed by Alvord to ensure that all the campaigns they take on have a high probability of success and according to the co-founders Smith and Alvord, they usually only take on about 10% of the people who solicit their service. “We believe we can tell when a campaign is going to succeed,” said Smith.
And they haven’t been proven wrong yet. Over the past few months, the group has taken on around 20 campaigns such as Trunkster, Awl & Sundry, RooSport, YOGA: TIME, BASICS, FreeWavs, Wearhaus Arc, and The Articulate Clutch Kickstarter campaigns, all of which have been successful. Smith and Alvord have worked some pretty incredible magic with the campaigns they’ve taken on. Wearhaus Arc, for example, hired Funded Today with 5-10 days left on the campaign to reach their $50k goal, which Funded Today helped them blow through by $200k. In other instance, FreeWavs had only raised $150k and brought the campaign to Funded Today with 100 hours left to make $120k; they reached and exceeded the goal by $25k. And lastly, their YOGA : TIME campaign was the most funded “app” in Kickstarter history. That’s incredible!
In my conversation with the co-founders, Smith explained that they work by the philosophy that “20% of the efforts determine 80% of the success, so [they] prefer to really dial in on 2-4 projects at a time.” Funded Today has been around since the beginning of 2014 and they’ve already raised about $5 million total on Kickstarter; on average, “Funded Today raises $51,812 per project it takes on during the 3-4 weeks the crowdfunding campaign is live.”
The Funded Today service charges 35% of the campaign’s total earnings. Though this sounds awfully hefty, there’s good reason behind this percentage. As part of the Funded Today service, 10% of the earnings are distributed back to backers in cashback rewards, and the other 25% pays for all the advertising money they fronted during the campaign and the team’s compensation. If the project isn’t funded, customers don’t pay. The Funded Today team is big on this, and has a strong policy that they “if it’s not working, we have no problem letting go. We won’t leach onto a campaign,” explained Smith.
This model sounds like exactly what the crowdfunding industry needs. People are always finding ways to innovate in the crowdfunding industry, but this was an idea I had never seen before. Interestingly enough, Funded Today has enough traction by word of mouth customers through the banners they post on the campaigns they work with; they haven’t needed to market their own service because of their existing traffic, which speaks volumes about their customer satisfaction. Funded Today hopes raise $10M on Kickstarter in 2015 and eventually to work with hundreds of campaigns on all different platforms; they have already raised over $5M and are gradually expanding to different crowdfunding platforms, namely IndieGoGo.
So it seems that Funded Today brings some good food for thought in terms of the room for creativity within the crowdfunding industry. Personally, I think the way they’ve pulled off tens and hundreds of thousands in just a few weeks is incredible. What do you think of Funded Today–would you use them for a Kickstarter project?
by Rafah Ali