Dozens of Vermont musicians and artists have used crowdfunding to raise money for their projects by appealing for donations through the New York City based Website Kickstarter.
The site enables people to post information about a project, such as recording a CD or publishing a book. And then they can raise money to pay for the production through small donations.
As the popularity of crowdfunding grows, Vermont versions of Kickstarter are cropping up in an effort to attract support for a variety of causes.
In the past 3 years more than $1,000,000 has been raised for Vermont projects on the popular Kickstarter Website.
The vast majority are arts related, but one of the most successful Vermont Kickstarter efforts was for a product called a Holdster.
The Holdster is a leather cup cozy that’s made to hold a canning jar that people drink out of. Marsh Gooding started the Burlington company by raising money on Kickstarter. His initial goal was $5,500. He ended up raising nearly $43,000.
"A few influential blogs that pay attention to Websites like Kickstarter and are looking for the next big thing saw our product and posted about it on their blog. Suddenly our product was in front of hundreds of thousands of people," says Gooding.
Gooding says his initial idea was to produce a single run of Holdsters and call it quits. But the money he’s raised will give him a shot at building a sustainable, profitable business. So far he’s generated $60,000 in sales, although that isn’t enough for him to quit his day job.
Now the Kickstarter model is being copied locally in hopes of putting Vermont entrepreneurs with specific social missions together with small donors.
One new Vermont crowdfunding portal is called Three Revolutions. It started a few months ago with a focus on raising donations for a variety of food and farming projects.
This week another new crowdfunding site was launched. The EcoHub is hoping to raise money for Vermont environmental projects. The portal was created by three women, all of whom are or have attended Vermont Law School.
Crowdfunding portals make money by taking a small percentage of the donations they help raise.
In order to be financially successful The EcoHub will eventually have to expand to include projects well beyond Vermont.
But co-founder Susan Bailey says starting off in a state seen as very friendly to environmental causes will help them test the viability of their idea.
"We really feel that Vermont is the best place for us to launch our business. Vermont is the true test for what we’re trying to do as a company," says Bailey.
There’s no question the broad based approach of Kickstarter has made crowdfunding an effective fundraising tool.
Sites like EcoHub hope to accomplish the same thing by focusing on a social mission.