Tag: startup fundraising

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backers launch perks, Kickstarter Accounting, Cost of Goods Sold, Profitable Kickstarter, Crowdfunding Fees

$100k Kickstarter: a Bad Business Idea? (Profit, Crowdfunding Tips)

Production costs and fulfillment costs seem to go hand in hand, which is why making a profitable Kickstarter is so hard. Often you are selling something which has not yet realized it’s full cost. This guide is to help you use crowdfunding strategy and basic accounting to design a Kickstarter which actually makes you money, instead of the other direction.

Understanding Cost of Goods Sold

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This is the ultimate number which you will arrive at, once your Kickstarter product is inside peoples hands. But it is also the hardest to calculate up front. Use our simplified Kickstarter cost of goods sold calculator, to make sure that after all is said and done, you walk away with a profit margin, and not a loss.

Kickstarter can cause capital loss, because it has higher unexpected costs. The symptoms of losing money is a common occurrence for first-time business owners, because in the creation and distribution of a new product, there are always common unexpected challenges. This goes way beyond just the fees charged by the platform, or the cost of shipping.

There is a lot that goes on in making a Kickstarter. The marketing cost itself is immense. Keep reading to learn more about why crowdfunding accounting is an important missing step in launching your project.

What turns a Wildly successful Kickstarter into a Bad Business Decision?

From a psychological standpoint, it’s easy to think you’ve done a great job by raising $60,000 for your new business. But depending on who helped you make it, and the way the money was used, you can end up spending even more than you earned just to get the rewards into people’s hands.

In spite of the negative possibilities known, many business people decide to launch a Kickstarter anyway, and they proceed with the Kickstarter video production, and the like. It’s understandable how it slips the minds of most small scale new to the industry crowdfunding projects, because there are so many combined hidden costs.

Kickstarters are business liabilities, unless you manage the production costs from end to end, before deciding on your goal, and how much you have to put toward your marketing cost. By working backward with the typical production fees, you can arrive at an understanding of how much kickstarter you can afford.

Transaction Costs

– [ ] Credit fee
– [ ] Platform fee
– [ ] Office fee

Moving money around is a big deal, and they take a Chunk. For safety , decide that 10% of your revenues will be eaten up on their way into and out of your account. The office fee is your banking costs, your costs for your accounting software, your costs for the support you will need in organizing everyone, and making sure your vendors get paid, and making sure you have things like mailers and a stamps machine.

Visual Content Costs, and Marketing Costs:

Sometimes people think marketing is simply one thing, but actually it is split into two categories, how you make the pitch content, and what you pay to push that pitch content to people. (Or even know the right people to push to).

So for visual content alone, you should expect to hire a cinematographer and kickstarter videographer, or even partner with a crowdfunding launch company. Easily 30% of your Revenues from your kickstarter will be used to pay back the marketing, and it is usually split down the middle in terms of how much. So if you raise $100,000 USD, expect to spend $30,000 on your marketing.

– [ ] $12,000 – All things related to your visual content (Video and Images)
– [ ] $3,000 – All things related to your page writing, your website writing, and your emails and social media posts writing
– [ ] $5,000 – The advertising marketing company will use this to make hundreds of customized ads, and to train the marketing bot for reaching the right people. This is a low conversion time in the marketing, as you are training the system
– [ ] $10,000 – The advertising marketing company will use this budget for your actual campaign. Targeted to the right people at $1,50 per click, this will guarantee that at least 6,500 people see your project. This is important because you will only have a 3% conversation rate. At a 3% conversion rate, you will have sold 195 units, which was your minimum for the successful product.

Key Takeaway: Make sure you price your rewards accordingly, because for a 50% profit on the marketing, (which you will need to break even for your production costs), you will need to raise at least $60,000 . If you need to make 60,000 from only selling 195 units, than the minimum cost of your Kickstarter reward should be $300.

But wait, my product is only $79!!

Well, we hate to say it, but the customer acquisition cost and the cost per acquisition is probably around $80. That’s might get you to sell the product, but you will have no money left even for the fulfillment.

This is why a $300 minimum product fee, is essential, and it’s also why any sane person would demand that they get $100,000 from the campaign, and not just $60,000, because it is only in the domain of 60-100k that campaigns can become profitable.

Pre-Fulfillment Costs

– [ ] Making the packaging that your product will fit into
– [ ] Making the technical user guide
– [ ] Printing the slip in user guide and marketing contents
– [ ] Software fees for getting responses from your backers
– [ ] Costs related to customer customization
– [ ] Fee’s paid out to your affiliates and anyone who helped spread the word about your project

For safety, assume that outside of your manufacturing cost, that 15% of your revenue will be used during the pre-fulfillment stage.

Manufacturing Costs

Getting your retail product out to market is the part that most product developers think of. It is a whole huge part of what it takes to actually come through on your promises. Expect 40% of your revenues to go to fulfilling the manufacturing side of your product.
– [ ] Moulding
– [ ] Assembling
– [ ] Core Pieces
– [ ] Packaging sent to them
– [ ] Paying Vendors
– [ ] Paying Factories
– [ ] Paying Shipping

Fulfillment and Shipping Costs

Getting the final product to your customer is not easy either. Whether you have a drop shipper or do it yourself, shipping is a whole helluva lots more difficult than you think. Without a corporate or freight account, you will be paying retail shipping grates, and some rewards are heavy.

Expect to pay 5% of your revenues – $18 per shipment, or a minimum of $3,000, just for your basic costs.
– [ ] Postage
– [ ] Handling
– [ ] Insurance
– [ ] Tracking

Other Costs

We would set aside another 10% for unrelated fees, everything from what you have to pay your assistant, to the fuel and freight cost from your manufacturer, it helps you have a margin of error, in case you eventually discover what was you actual cost of goods sold.

Bringing It all Together – What Is your Kickstarter Accounting Cost and Your Crowdfunding Profit Margin?

– [ ] Transaction Fees: 10%
– [ ] Visual and Marketing: 30%
– [ ] Pre-Fulfillment: 15%
– [ ] Manufacturing: 40%
– [ ] Shipping: 5%
– [ ] Other Costs: 10%
Total: 110%

Total Profit Margin: -10%.

(Negative 10%.  Umm… I thought we were starting a business?)

Now you see why it is so hard to earn $60,000 for your new project and to keep anything for yourself. That is why we so strongly suggest putting your stretch goal at $100,000 USD, that way you can swing the numbers more in your favor, to even eek out a +10% Profit Margin.

Here are a few things you can to to increase the profit margin of your kickstarter:

– [ ] Increase the per unit reward cost of $400.
– [ ] Don’t use the 10% Other costs and be a smart business person, so that your margin of error become applied to your profit margin
– [ ] Spend less on your video
– [ ] Hit a larger goal by adding +$5000 more dollars to your click ad spend
– [ ] Save 15% by getting your friends to pledge

Let’s take a look at these in depth

Spend Less Money

It all comes down to the final tally. If you look for every opportunity to save on cost, it will turn your kickstarter from a net draw, into a net profit. Let’s look at how.

Increase the Per Unit Reward Price – Your Crowdfunding Promotion Earns More

When you use an upsell, you can still sell your unit for $300, and recoup $100 of bonuses on the backend. Is there any key feature that you can subtract from the main product, only to add-in later, during the survey checkout process, which will inspire 2/3rds of your backers to opt in to more? If not, is there any thing you can add now, as a product feature, which would merit the 25% increase?

Don’t use your emergency fund – Best online fundraising approach

That extra 10% we set aside for your mistakes can be THE THING that gets you to a break even point. No extra snacks. Do not let your agency charge you for extra snacks. Make them write into the contract “nothing besides the snacks names here will be charged, we confirm that nothing in addition the contract amount will be billed to the client.” If they do charge you, don’t pay. Direct them toward your agreement. You do not have to pay for services you didn’t ask for, or things you didn’t know you were getting. The same goes for your manufacturer. Put it all on paper ahead of time. If someone pushes you, aim and shoot. If you agency or manufacturer or anyone else for that matters asks for more than you agreed, they deserve to be rewarded with a “crisis” on their hands. It’s better to be the mean client which gets so upset that the case goest to the agency owner, rather than the pacifying client who agrees to pay more.

Make a Video For Less – Crowd Funding Help

Choosing to go the professional route is a given, if you want your marketing to succeed and stand a chance to air on the public networks. But what most video studios won’t tell you is that they are padding the fees for just about everyone involved. Models $500? How about $250. Equipment $800? How about $400. Editing $4000? Why not $3000. If your favorite video partner is coming in higher than you’d hope, you an write back with your own budget, and show the allocations, and ask – can you do it for this? More than frequently you will get a reply where they are willing to budge on certain, if not all costs.

And if negotiation with boutique video studios is not your favorite thing, then come over and save 50% on your agency fee by working with Start Motion Media. Our full service creative production staff are available for months at time for your project, with out the door costs staring at $7500 (with payment plans), a full 50% below what many of the other highest class video studios charge.

Hit a Larger Kickstarter Project Goal:

There is only one place in your kickstarter accounting case study that has a linear affect on your revenues. This means that of all the places you can decide to add more money, there is only one category where it will have any impact at all. That is in your ads, once the social media advertising machine is trained. So I would say if you can change your $10,000 click ads budget to $15,000, (a 33% increase), that you would also see a 33% increase in the amount of revenue that you receive.

Save 15% (100% of your Ad costs) by getting friends to pledge as backers

This is the one and only way for moving the needle so that your Kickstarter and really any crowdfunding can of itself be profitable. Wouldn’t it be nice to at least make $10,000 back , after you had invested so much in manufacturing your first round product? Some companies don’t care about their Kickstarter being profitable, because it is a loss leader marketing campaign. However. I personally would not want to be liable for having got do a second round of sales just to make up for my first round of sales. The way that (even small) Kickstarter’s make a huge leap into profitability territory is to make sure that you have lots and lots of “unpaid leads” – these are people you bring to your campaign through manual (existing relationship) methods.

The real way to crowdfund (The TOP Kickstarter Strategy)

You will become a profitable campaign if half of the backers were not needing to charge the $80 cost per aquisition. Right away your profits on $300 will jump by approx 30%, which is the needed margin to make it all work. Think of going through your whole phone book and your whole email contacts of everyone in the whole freaking world that you know. Make a list of their emails, and assign Y/N Categories – which of these people do you feel is at least 1/3 (one third) likely to have enough money and interest to buy my product? Once you have your targeted friends list, start marketing to them. But remember marketing to friends is a completely different kind of conversation.

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The way to reach out to a friend and have them actually give you money and feel good about it is the following:

– [ ] Text them “Hi how are you, was thinking of you”
– [ ] If you don’t hear back, follow up in three days; “Hi did you get my last message? Was just checking in I hope you are ok”
– [ ] You will hear back after the second message
– [ ] Acknowledge them for what they shared and then add a first tip about your project; “actually I’ve been working on … and I am about to go into manufacturing!”
– [ ] Wait for their reply
– [ ] Then ask – “I am still working on the page and don’t know if it makes sense, could you review it for me?”
– [ ] They say yes
– [ ] Reply – “OK great I will send you a link when it’s ready”

This way, someone is warm and ready when they receive a product sales page with a price tag on it. And if you include them at pre-launch, they don’t feel rushed, which is a major bonus. Any feedback they give you is pure gold – customer research, but it also serves them to feel an emotional bond to your project. Once the bond and warmth is there, it is only a short step forward, to tell them “We’re live, would. You be a backer?”

This is the only way to get past the huge gulf of asking your friends for money, where both parties still feel good. And the best part is a backer from this marketing method is a full 1/3 more profitable than one you have to use paid ads for. I always recommend that my clients drive the first $30,000 of their kickstarter pledges this way, both for creating more trust and foundation in the project, and also for moving the needle so that their final ut the door cost of goods sold is still allowing for a small profit.

I hope this ultra crowdfunding accounting guide has been helpful, cheers to your success!

From the Author: Michael Zeligs has launched hundreds of successful kickstarters since 2009, and he is the founder and chief operating officer of Start Motion Media, an affordable kickstarter video production company.




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Cool Technologies being used at FIFA World Cup Qatar 2022

FIFA World Cup 2022 being held in Qatar has attracted hundreds of millions of fans from across the world. Interesting matches have become a famous topic of discussion these days. But this year, it’s not just the game that is making rounds on the internet. The modern technology that is being used in this year’s world cup is just astonishing. It looks unbelievable just to think about how a sport is using this much-advanced technology. This is being used to make sure that the game is fair, to facilitate players and especially the spectators that have traveled from all over the world.


Qatar and FIFA together are making sure that this world cup gives people the experience of a lifetime. In case you’re wondering how to catch the world cup live, opt for Windstream Internet. Watching these thrilling matches live has to be without interruption otherwise it just kills the vibes.


However, FIFA World Cup Qatar 2022 is using the following pieces of modern technology for an enhanced football experience. Keep reading to learn more about it.

  1. Smart Ball with Sensors

This one thing is capable of changing football forever. This year, FIFA has rolled the ball that has sensors inserted in them. This ball produced by Adidas comes with motion sensors installed. The sensors are so strong and smart that almost 500 times per second of precise location data can be recorded. According to the Adidas authorities, this sensor device only weighs 14 grams.


The ball was tested enough times to conclude that it does not affect player performance at all. This technology won’t only help the on-field referee but also VAR (Virtual Assistance Referee). The referees can make more precise calls and the issue of wrong decisions leading to big losses can be reduced as well.

  1. Semi-Automated Offside Technology

So many balls went inside the goalpost but were declared null because the goal was offside. Sometimes these decisions can be wrong but such things are non-affordable at an event as big as the world cup. To make decisions fair and acceptable, FIFA came up with this Semi-Automated Offside Technology. For this, 12 tracking cameras have been employed, attached to the roof of the stadium. These hawk-eye cameras can send data on the player’s position up to 29 data points 50 times per second. This sends the exact location of the player thus helping in declaring the goal as offside or not. The system also created a 3D animation of the player’s position using the sent data. This graphic is then shown on the big screen and to the audiences on TV.

  1. System of Stadium Cooling

During the selection of Qatar as host for the 2022 FIFA World cup, the issue of heat was raised. The country is located in such a location that it can get extremely hot in the daytime. The host country was ready to deal with this as well. A Qatari professor, Saud Abdul Aziz Abdul Ghani also known as Dr. Cool, came up with an advanced cooling system. It works by drawing air into the pipes and vents of the stadium. There the air is cooled, cleaned, and then pumped out into the stadium. This creates a kind of cool bubble inside the stadium. There are also sensors installed to control the stadium’s temperature. Another system that is being used is Spot Cooling. Through this, only those spots in the stadium will be cooled where fans are sitting. This saves lots of energy. Overall, the stadium’s temperature will be kept at 64-75F.

  1. The Special FIFA Player App

This special app has been designed especially for the players. FIFA developed this app in collaboration with the global representatives of international footballers, FIFPRO. Using this app, players will be able to analyze their performance after the match. This has happened for the first time in the history of FIFA World Cups that players can see their performance stats. Data like Enhanced football data metrics, Physical performance metrics, and Enhanced football intelligence metrics will be provided to the players. This data is then matched and synchronized with the match footage, giving a detailed insight to the players.

  1. Goal-Line Technology

This is a special technology to determine whether the ball did cross the goal line or not. Although this technology started being used in the 2014 world cup, this year more advanced version is in use. The system can send information to the referee within one second. This helps the referee make a quick and correct decision. For this purpose, 14 high-quality speed cameras are being used. Just like Semi-Automated Offside Technology, a 3D graphic of the goal line is also shown on the big screen in the stadium and on TV.

  1. Safety and Security Technology

The security of players, country representatives, and the audience became the top priority for the Qatari administration. Special measures have been employed for this purpose. For this, facial recognition technology is being used using high-quality CCTV cameras through the Digital Twin system. Adding another layer to the security, Qatar has also deployed AI to detect any social media abuse towards the players. In previous events, some incidents were recorded where racial slurs were aimed at players. Once the system detects hate speech, that tweet, post, or comment will no longer be visible.


The matches in FIFA World Cup 2022 have entered the knockout stage where big teams have also gone home. Among the excitement, advanced technology is helping match officials, players, and fans around the world to get the maximum football experience.









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