MELBOURNE — Inside an enterprising Melbourne city co-working office on Bourke Street, the Australian crowdfunding platform Pozible is preparing for DocWeek, a live documentary crowdfunding event in Adelaide. The world first pitch is planned to coincide with the release of Pozible’s mobile platform — both initiatives form part of the team’s 2013 strategy.
Alan Crabbe, Pozible co-director and founder, says they’re trying to give their clients a competitive advantage and prepare them for the imminent changes on the crowdfunding horizon. The Pozible director says the biggest of these changes will be the rollout of the JOBS (Jumpstart Our Business Startups) Act, which U.S. President Barack Obama passed last April.
In essence, the bill will give the American public the ability to receive company equity in exchange for funding. Currently crowdfunding platforms operate on a reward, gift or donation basis only.
In Australia, rules around investments are heavily regulated by the Australian Securities and Investments Commission (ASIC). Under the Australian Corporations Act 2001, projects are not permitted to raise capital without issuing a disclosure document. There is however an exception known as the 20/12 rule which excludes projects (of less than 20 people), generating less than AUD$2 million (just over USD$2 million) operating within a continuous 12-month period.
Crabbes says there are big implications for the crowdfunding industry in Australia.
“Potentially — you will see creative projects, startups and small businesses at a disadvantage to their international counterparts when raising capital funding,” Crabbe speculates. “Australians may also choose to setup in international markets simply to pitch and raise funds in less restrictive environments – something that already has started happening in the tech startup space.”
The Pozible team are keeping a careful watch on the progress of the JOBS Act (the bill was expected to come into effect early this year but has since been delayed) to set the tone for the Australian market. The hope that the changes will loosen the legislative grips on the crowdfunding rules in Australia.
In the meantime, Pozible will focus their 2013 strategy on forging partnerships with government, arts and corporate organizations to strengthen their foothold in the competitive crowdfunding market.
When Pozible was first launched, co-founders Crabbe and Rick Chen wanted to provide an alternative to traditional forms of government funding for the arts. This year they’ll shift gears, championing a “complementary service” strategy that works with third-party organizations.
Like other crowdfunding platforms of its kind, Pozible works on an all-or-nothing model, which means projects only receive funding if they meet their set financial target within a one to 90 day period — otherwise it’s zilch and back to the drawing board. For Pozible’s efforts (training, facilitation, education, promotion), they receive a four to five percent cut of the money raised from each successful project.
In the world crowdfunding arena, Pozible doesn’t even come close to the U.S. behemoth Kickstarter which reported a record year in 2012 (over two million people pledged a total of USD$319 million, funding over 18,000 projects). In contrast, last year Pozible raised AUD$4.9 million and funded 1,615 successful projects.
But Crabbe appears unfazed by the statistics. He offers the per capita perspective; ”If you think about it, Australia is the most active at crowdfunding, in terms of projects to number of people in the country,” he says.
Last year the Australian crowdfunding platform achieved an average success rate of 56 percent, up from 45 percent in 2011. As of February 2013, the platform has helped funnel a total of AUD$8 million (USD$8.2 million) across 1,300 successful projects since it was established in May 2010.
Today Pozible has over 100,000 users across 95 countries, operating with 22 currencies. It’s considered one of Australia’s most popular crowdfunding platforms for creative projects, but is by no means the only one.
Pozible anticipates that 2013 will be another big year in crowdfunding, with plenty of worthwhile projects vying for public funds. A look at the Pozible website shows the variety of projects that have adopted the platform with varying success.
The romance-thriller film The Trouble With E allows the characters from the film to do the pitching. By adopting this creative approach, film writer and director Louise Wadley was able to give people a little taste of the story and the main characters while also showcasing her comedic writing. To date they have raised just over AUD$50,000 (USD$52,000) with a set target of AUD$88,000 (USD$91,000).
In contrast AUTHENTIC WITH CAPS, an audio-narrated iPad project, sees the project’s creator and writer Christy Dena pitching directly to the viewer. Since launching the project with a target of AUD$15,000 (USD$15,500), Dena has raised around AUD$4,700 (USD$4,900) and attracted interest in the use of her technology for other projects.
Just this month, filmmakers Chris Kamen, Jessie Taylor and Dave Schmidt achieved their target of AUD$60,000 (USD$62,000). This has enabled them to take Deep Blue Sea, a film about Australia’s controversial asylum seeker issue, on a national screening tour.
But the success project of 2012 was David Leadbetter and Drew Hobbs’s IRL Shooter Patient O, a real life role-playing zombie video game, which currently holds the record for the most successful project in Pozible history. The AUD$250,000 (USD$258,800) that was raised in ticket sales became the seed money they needed to start up the venture. The trio are now looking for further (private) investors to help them develop the game and technology further.
Crabbe, an Irish expat Melbourne resident, believes that Australian projects generally tend to do very well due to the country’s geographical distance from the rest of the world.
“Australians are very multicultural and have friends, fans and networks all around the world, which in turn, attracts broad support for projects,” he says, theorizing. “Because we are geographically isolated and because Australians are generally very supportive of local endeavours, projects tend to do well here.”
He makes the further claim that Melbourne has a particular advantage as Australia’s “creative capital,” with so many independent artists, musicians, filmmakers and creatives living and using the service.
Crabbe predicts that as crowdfunding becomes a more accepted model for raising capital in Australia, established companies, artists and creatives will use the platform as part of a bigger marketing strategy. He offers Australian songstress Clare Bowditch as an example.
Bowditch has used her fame to raise capital and awareness for her creative mentoring venture Big Hearted Business. She met her target of AUD$26,450 (US $27,240) in a record six days. Crabbe says that while Bowditch is able to harness her very strong fanbase, others may need to get more creative.
“Each project has to find the unique selling points,” Crabbe explains. “I think people are becoming more social and looking for shared experiences. The projects in the future will find really smart ways to get people involved.”