Kickstarter: Financing Small Movies Online

Steve Taylor's first feature, , was a drama about an encounter between two pastors. It cost $1.2 million to make, was sold to Sony Pictures (SNE) for $1.5 million in 2006, took in a respectable $500,000 at the box office, and had a profitable afterlife on DVD. Taylor figured his next project, an adaptation of Christian writer Donald Miller's best-selling memoir, , would be an easy sell. He spent four years pitching investors, and by last September thought he'd locked up financing. "We had a guy in Seattle who was going to come in for $250,000 and then another guy in L.A. who was going to come in for $250,000," Taylor says. On the eve of preproduction, the California investor dropped out, and Taylor considered the project dead.

When Miller broke the news on his personal blog, two fans in Tennessee stepped forward offering to raise the needed funds on the website Kickstarter. Founded in 2009, Kickstarter is an online fundraising platform for creative projects. Musicians, designers, filmmakers, and other artists craft a short pitch, usually a video, post it on the site, and set a fundraising target and a time frame. Contributors are more like donors than investors, since they earn no return or equity, though they are promised rewards (a copy of the CD, dinner with the artist). If the project meets its goal, Kickstarter, a for-profit company, takes a 5 percent cut and the creator gets the rest. If it falls short, no money changes hands.