If you’re thinking about crowdfunding a book, you probably know about the different crowdfunding options available online. Two of the most popular are Kickstarter and Indiegogo and they have different methods for raising cash for projects.
Kickstarter uses a “fixed funding” method. That means that you must raise the entire amount set as your project goal in order to get any of the funding. For example, if your project goal is $5,000 but you only raise $4,750 you don’t get any of the money. What about $4,900? Nope. You must hit your goal, otherwise the credit cards of your backers will not be charged and you get $0.
Indiegogo provides an option for “flexible funding.” That means no matter what you goal is, you’ll get all the money you raise. If your goal is $5,000 and you raise $100, you’ll get $100 (well, minus project fees). If you raise $4,900, you’ll get $4,900 (minus fees).
This concept confuses some authors. I mean, why in the world wouldn’t you just want to get all of the money you raise? What’s the point of setting up a project if you might not get anything?
Well, there are some really good reasons why you might want to choose a fixed funding platform (either Kickstarter, the Indiegogo fixed funding option, or some other platform). For one thing, what is your project budget? Are you producing only an ebook and if you don’t raise your entire project amount you can still deliver a book and perks to your backers? Well then, flexible funding might be for you.
But what if you want to product a hardback book and your overall project budget really is around $5,000. What happens if you set up your project as flexible funding, but then only raise $1,000–well below the funding you need to print your book for your backers. Will you be able to afford to produce the book you promised your backers? If the answer to that question is no you should strongly consider fixed funding.
Another reason why some crowdfunding experts recommend fixed funding is because of the sense of urgency the “all or nothing” approach conveys. People know that if they don’t back your project, your book may not get printed. That’s additional incentive for some people to go ahead and pony up and back your project.
Selecting either fixed or flexible funding is one of the most important decisions you’ll make while setting up your crowdfunding campaign. Make sure you choose wisely!