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Crowdfunding for authors: Spread the love…and the risk

By Carol Harrison

How do you make a small fortune in publishing? Start with a big fortune.

Pretty gloomy, huh? Well, when stalwarts such as Key Porter Books (2010) and Douglas and McIntyre (2012) go bankrupt or must sell off their assets, it sends shivers up the spines of not only established authors but also those wanting to get established.

You can self-publish your book, but anyone who’s done so knows it can be a big financial commitment—even if you create an ebook to avoid PP&B (paper, printing, and binding) costs. The thing still needs to be edited, proofread, and designed. (And, yes, many ebooks have “covers” to gain visual marketing traction.)

Many authors (or, better, entrepreneurs) are now turning to crowdfunding. In a 2011 study published by the Journal of Service Management, “‘crowdfunding’ is a collective effort by people who network and pool their money together, usually via the Internet, in order to invest in and support efforts initiated by other people or organizations.”

EAC member Vanessa Ricci-Thode took this route to publish her first book, Dragon Whisperer, with Greg Ioannou’s Iguana Press. She sought funding through Indiegogo. In her online profile, she says that “[a]ll contributions will go toward helping Iguana Books cover the following production and promotion costs: editing, including copy editing and proofreading; cover design; layout for print and ebook; [and] marketing & distribution.”

Some may scoff at the idea of crowdfunding, but they’d be alone. According to the Guardian, bestselling authors such as Terry Jones and Tibor Fischer have signed up for Unbound, the U.K.-based platform specifically for books. It allows writers to pitch ideas online to readers, who can fund the project if they like. In exchange, they can receive anything from an ebook, a limited edition print copy, or lunch with the author. Others who support the initiative but have yet to sign on include Bernard Cornwell, Philip Pullman, and Noam Chomsky.

Easy for them, of course―they could sell a shopping list! But the beauty of the model is that the risk has been spread out among a few, or sometimes many, people. Sure, the author may have to make up the shortfall, but that’s chump change compared to funding the whole enterprise.

So how does crowdfunding work? It depends on which platform you choose: Unbound, Kickstarter, and Indiegogo are among the most well known. All of them are free to join, but you must have a plan in place in order to set your funding goal and be able to answer questions of your supporters. The key difference is whether or not you get to actually keep the money raised if you don’t meet your goal. With Kickstarter, “If the project succeeds in reaching its funding goal, all backers’ credit cards are charged when time expires. If the project falls short, no one is charged. Funding on Kickstarter is all-or-nothing.” Indiegogo and Kickstarter charge fees―4% and 5%, respectively―on money raised, depending on whether or not you meet your goal. Each site has specific criteria.

Unbound seems to work a little differently. Its focus is on books while Kickstarter and Indiegogo are open to almost any creative project. However, Unbound maintains a submission policy similar to that of a traditional publishing house: “If you are a published author—or a literary agent—and you’re interested in finding out more about Unbound, you can drop us a line….If you are a first-time author, we will consider proposals submitted through literary agents or writing websites…but we will also accept unsolicited proposals….Please bear in mind that we are currently inundated with proposals—so it may take us a while to get back to you.”

In an email, Ricci-Thode said that, “Indiegogo was recommended by the publisher because it is set up to handle foreign currency exchange, while Kickstarter and other sites deal in only one currency, usually U.S. dollars. If you browse other campaigns on Indiegogo, you’ll find them looking for funds in USD, CAD, euros, or pounds. The international appeal can potentially lead to a larger audience to either help raise funds or support the book once it has been published.”

While she has the support of a small press, Ricci-Thode recognizes the advantages crowdfunding has for self-published authors. Not only can they “put together a more professional book than they could on their own” but they “can afford to hire professional designers and editors who can give a real advantage over other self-published titles, which can be pretty shoddy.”

As the study shows, consumers “play a new role in some markets: that of providing capital and investment support to the offering.” Ricci-Thode agrees: “Crowdfunding also gives authors the opportunity to build a fan base and support before the book is launched. If campaign goals are well thought out, then I don’t see any real disadvantages to crowdfunding a book. The disadvantage there is in not meeting the goal, because the site’s fees (at least for Indiegogo) are higher if the goal isn’t met. It’s also a lot of work to run a successful campaign, but any aspect of self-publishing (or publishing in general), when taken seriously, is difficult.”

It’s early days yet, but a success story has emerged. Pulitzer Prize–nominated cartoonist Matt Bors raised more than US$35,000 from 725 backers in his Kickstarter campaign to publish a full-colour, 225-page collection of his cartoons and essays.

It could be argued that established authors seeking funding from their fans to publish work that perhaps their publishers won’t publish—such as short stories, novellas, and essays—draw pledges away from unestablished authors. However, that happens in the open market regardless of the business model. What the presence of well-known writers does is legitimize the crowdfunding scheme. Can anyone become a star? Perhaps, but most likely not. But by spreading the risk and perhaps increasing the funding available to a new author, it’s possible to improve the self-published product.

Carol Harrison is a Toronto-based freelance editor by day and a bookseller by night—a nerdy generalist with a Whovian heart(s).


1 Comment

  1. mikaellarojasfanon says:

    Reblogged this on Soosoo Economics.

    Like

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