Show me the money, baby!
But more importantly, make sure you read the fine print before choosing your crowd funding platform.
Recently an indie musician trying to plan a US tour asked what we thought about using PledgeMusic to host a crowd funding campaign to help raise money for this tour.
Great idea! …if you:
- have the network (enough people willing to give you money), and
- can execute the promotion of your campaign properly (grab interest and make people want to give).
On another note, one of our members and host of MSI: Music Scene Investigation, Mr. Richard Wildman, responded with a detailed comment concerning the finer details of PledgeMusic’s Terms and Policies. These details referred to the releasing of funds and the percentages/fees involved with processing transactions. I will share his observations below, but first…
Since 1 out of 1,000 (I’m making up random stats), actually read through the terms of service and other fine print… I decided to do some deeper research and present the information to you in an organized format.
I read through the FAQs, Terms of Service, and other Legal documents made available publicly via the websites of Rockethub, PledgeMusic, Indiegogo and Kickstarter. You can find direct links to all these documents at the end of this article.
Be sure YOU thoroughly read all the terms, policies, and legal information concerning each platform.
Richard was quick to point out:
If I read it correctly, let’s say you were trying to raise 10,000 dollars for your tour and were successful. PledgeMusic would subtract 15% from the 10,000 dollar goal, which would leave 8500. At that point you would receive 75% of that 8500. So you would get 6375, with the remaining 25% (2125) held until “your finished release is uploaded to the PledgeMusic site.” As you are raising money for a tour that bit confused me because of your project type. Do they mean you wouldn’t be able to get that 25% until after the tour was completed?
I guess what I’m trying to say is that you’ll really need to examine how much money you are wanting to raise, because the numbers and way the pledges are distributed seem a little tricky. I’m not saying that they are sketchy. If I were trying to raise 10000, I would add an additional 40%, or so on to the amount needed to cover the PledgeMusic fee and the 25% that’s held until the projects completion, because I might really need the 10000 I started out to raise instead of only getting immediate access to 6375.
The moral of today’s story?
Read the fine print.
The other thing to take away from this information is you need to adjust your goal to reflect these commissions and processing fees.
Asking for 10 grand from PledgeMusic will only get you 8500 total. And, you only receive 75% until you complete and upload your finished project. Then you can receive the remaining 25%.
Richard pointed this out but the point is worth driving home.