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Sunday, Oct 1, 2023

LA-Based Companies Are Riding the Wave of Kickstarter Funding

When it comes to Kickstarter, Exploding Kittens is blowing up.

Since 2015, the oddly named but hugely successful Fairfax-based tabletop game company has created L.A.’s second-, fourth- and fifth-most subscribed projects on the crowdfunding platform.

Exploding Kittens Inc., however, is just one of many Los Angeles-based businesses that have reaped the benefits of Kickstarter Inc.

In fact, according to recent research by Tide Platform Ltd., a UK-based financial software company, Los Angeles has raised more money through Brooklyn, N.Y.-based Kickstarter than any city in the world.

Projects and companies based in Los Angeles have raised more than $313 million since 2015, topping second-place New York, which garnered $311 million in funding.

L.A.’s top project is the animated web series “Critical Role: The Legend of Vox Machina,” which raised more than $11 million to become Kickstarter’s highest funded film and video project of all time.

Amazon.com Inc.’s Prime Video platform picked up exclusive streaming rights for the “Critical Role” series’ two seasons.

But it’s the team at Exploding Kittens, which received a $30 million investment from an affiliate of Playa Vista-based private equity firm Chernin Group earlier this year, that has really figured out how to maximize Kickstarter.

“When we approach Kickstarter, we’re not looking for funding, we’re looking for a crowd,” said Elan Lee, co-creator of Exploding Kittens.

Exploding Kittens co-creator Elan Lee

The Xbox game designer turned board game entrepreneur said his team’s formula for Kickstarter success was getting buy-in from fans and future customers by asking them to help join in the design process.

Feedback and funding from the platform helped Exploding Kittens develop a series of multimillion-dollar board games with bizarre titles, including Bears vs. Babies and Throw Throw Burrito.

Exploding Kittens’ Throw Throw Burrito game.

“We’ve never put a project up for crowdfunding that was complete,” said Lee, adding that Exploding Kittens would incorporate suggestions and feedback on various aspects of its games from backers on Kickstarter.

Jesse Jacobs, president and co-founder of Chernin Group, said his firm viewed the Kickstarter crowdfunding approach as a “fantastic way to test a brand with the audience.”

“The fact that Exploding Kittens, with really no marketing money, was able to have the community embrace these games and fund them at these levels was very impressive,” Jacobs said.

He added that he wasn’t surprised Los Angeles claimed the top spot on the Kickstarter fundraising list.

“If you look at what makes a successful crowdfunding campaign, so much of it comes down to storytelling and content,” Jacobs said. “You are ultimately trying to tell the story of something that doesn’t exist today.”

L.A.’s proliferation of creative storytellers, according to Jacobs, gives the city a natural leg-up over other locations when pitching novel or unusual concepts to the online public.

The city’s creative legacy was reflected in the types of projects funded. According to the Tide research, Los Angeles-based film and video projects raised nearly $76 million on Kickstarter since 2015 — accounting for nearly half of all global funding in that category.

Funding for these projects far outstripped the total raised by games, the second-largest category. Games projects raised just over $55 million during the same period.

The average value of individual game projects, however, was significantly higher than that of film and video.

“There is something in the psychology of humans that when they get a physical, tangible output from backing a project, they tend to back at higher levels,” said Elise McCave, director of narrative film at Kickstarter.

McCave said there has been a trend toward fewer film and video projects on the platform in recent years, which has been accompanied by a corresponding rise in the success rate of these projects.

The platform saw a record number of film and video projects in 2015, but the category also delivered its lowest success rate, according to McCave. This year, she said, the success rate has rebounded to a record high for the platform.

“Kickstarter is not new — we’re entering our teen years soon,” McCave said. “People are more savvy now about what works and doesn’t work.”

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