Kickstarter Kicks Crowdfunding Into High Gear

Crowdfunding is coming into its own—fast.

As one company after another has turned to raising money online rather than the traditional route of pitching investors and venture capitalists, one firm has managed to tap into more than $1 million on early player Kickstarter in a day, while another broke the $1 million mark in just a couple of months.

Tim Schafer, founder of game publisher Double Fine Productions, was looking to roll up $400,000 over the course of 33 days when he posted his funding plea on Kickstarter Wednesday night. He had pledges for the full amount within eight hours, and had raised more than $1 million within 24 hours. As of this morning, 35,343 backers had committed nearly $1.3 million to Schafer’s product.

Schafer is looking to use the money to develop a new game, and the extra money he brings in will be used to expand that effort for consoles like those of the XBox and Sony PlayStation. He writes on his Kickstarter page:

You people are amazing! But it's not over yet. The number keeps going up and now the question is just how much news do we want to make with this? We're getting a lot of attention already and it seems like this little project could have an impact beyond itself.

All money raised will go to make the game and documentary better. Additional money means it can appear on more platforms, be translated into more languages, have more music and voice, and an original soundtrack for the documentary, and more!

Your backing and comments have been truly inspiring to me and the team, so on behalf of Double Fine and 2 Player Productions I want to say THANK YOU!!!

I can't wait to see where this thing can go!

Just as Schaffer broke the $1 million funding mark, so did ElevationLab of Portland, Oregon. That company was looking for cash to fund development of the ElevationDock, an aluminum dock for iPhones and iPods.

By this morning, ElevationLab had raised about $1.1 million from 10,374 backers. The company had set out to raise $75,000 in December and had hit that goal by mid month, but support—and funds—kept pouring in, Liz Gannes writes in the Wall Street Journal’s AllThingsD blog. The funding period ends tomorrow, and with a return of more than 14 times the ask, ElevationLab is definitely happy with the results.

So what is this crowdsourcing firm that has everyone abuzz? Founded in 2008 by by Perry Chen, Yancey Strickler, and Charles Adler and venture backed to the tune of $10 million, Kickstarter bills itself as the largest online community to raise funds for creative projects. Those who initiate the project set their fundraising goal, and backers pledge money toward the goal. If the goal is not reached, no one has to ante up, and the company or person who initiated the project isn’t obligated to go forward.

Kickstarter takes a 5 percent cut of the money raised per project.

And while Kickstarter is certainly getting plenty of attention, including an appearance on Portlandia, it’s far from the only online player looking to disrupt the method people use to raise money.

This morning, a Y Combinator-funded startup, Crowdtilt, announced that it had come out of private beta and would be available to the public. Unlike Kickstarter—which is used to fund such creative projects as film, games, or publishing—Crowdtilt’s goal is to allow users to tap their networks to fund just about anything, including such things as vacations or even the rental of a bus to go to a Phish concert.

In November, Tanya Prive launched the crowdfunding site Rock The Post, which is geared toward businesses and nonprofits raising funds from strangers, in New York. So far, that company has raised $700,000 in funding from angel investors stretching from Spain to Hong Kong to Canada and the United States.

---

Kent Bernhard Jr. is News Editor of Portfolio.com