A crowdfunding company in Santa Monica is betting Donald Trump, Adam Carolla and other celebrities can convince their fans to open their wallets.
FundAnything, launched in May, plans to compete with big-name crowdfunding companies such as Kickstarter Inc. and Indiegogo Inc. by having the rich and famous promote fundraising campaigns. It wants to become the crowdfunding site of choice for celebrity-led projects.
Founder Bill Zanker said celebrities will introduce crowdfunding – Internet fundraising – to the millions of Americans who haven’t heard of it.
“The hipster community has embraced crowdfunding, but most Americans don’t know what it is,” Zanker said. “I’m saying let’s bring it to the masses. The only way to do that is with Donald Trump and other celebrities.”
Celebrities have helped Zanker build a business before. In 1980, he founded Learning Annex LP, an adult education company offering classes and seminars. The Learning Annex saw huge growth in the 2000s after Zanker focused on huge conferences headlined by big celebrities, including Trump, who is also an investor in FundAnything.
Celebrity endorsements are a new twist in the still-young business of crowdfunding, through which individuals or small companies can raise thousands or even millions of dollars online from small contributors. Crowdfunding campaigns raised $2.7 billion last year, and that figure is expected to nearly double this year, according to West L.A. crowdfunding research firm Massolution.
Zanker hopes to speed up that growth and take over a chunk of the crowdfunding market. His goal is for campaigns on FundAnything to raise $1 billion annually within a few years. The company launched its first celebrity-backed campaign last week, a film project produced by podcaster and comedian Carolla.
Though Zanker and most of the FundAnything team come from outside the tech world, their celebrity focus mirrors that of numerous Silicon Beach firms that use celebrities to hawk shoes, clothes and cosmetics. ShoeDazzle.com Inc. was co-founded by Kim Kardashian. BeachMint sells T-shirts picked by Mary-Kate and Ashley Olsen as wells as furniture picked by Justin Timberlake.
FundAnything might be the first crowdfunding site with that celebrity focus, but others will likely follow, said Carl Esposti, Massolution’s chief executive.
“They’re starting to recognize associations with celebrities with large social media followings are a way to propagate campaigns,” he said. “I don’t think it’s rocket science to think if you get big names associated with something, it’s going to give it uplift.”
Zanker, along with Trump and a few other investors, started FundAnything with $1.5 million earlier this year. Zanker is the company’s chief executive. Trump owns 10 percent.
The company’s team of about a dozen employees, most now in the process of moving to Los Angeles, includes several former Learning Annex executives, among them its former chief technical officer and celebrity booker. The Learning Annex continues to operate classes and seminars nationwide.
Like most crowdfunding sites, FundAnything makes money by taking a percentage of all money raised on the site. For campaigns that meet their fundraising goal, FundAnything takes 5 percent. For campaigns that fall short, the company takes 9 percent – an incentive, Zanker said, for campaigns to set realistic goals.
In contrast, Kickstarter collects a flat fee of 5 percent, but only if a project meets its fundraising goal. If the target is not met, the money is returned to donors.
As the name suggests, FundAnything lets people raise money for nearly any purpose: starting up a small business, covering medical bills or putting down a security deposit on an apartment.
In that sense, FundAnything is no different from better-known crowdfunding companies such as San Francisco’s Indiegogo or New York’s RocketHub Inc. Kickstarter, however, allows only campaigns for art, food and tech-related projects, not for general fundraising.
But where FundAnything aims to set itself apart is in how it promotes campaigns. Brad Wyman, FundAnything’s chief creative officer, spent a year at Indiegogo and said that the company and others don’t do much in the way of promotion. Rather, campaigns market themselves with little involvement from the crowdfunding sites.
Kim Sherrell, an L.A. filmmaker who recently raised $87,000 through Kickstarter for a documentary about crowdfunding, said she worked full time to get press coverage of her campaign.
“Getting the attention of the right people is key,” she said. “Kickstarter has highlights and staff picks, but they don’t really go out of their way to promote you.”
FundAnything, meanwhile, plans to hire celebrities – Trump is just the first – to endorse and promote campaigns through their own social networks. The FundAnything site already features a special section called Donald’s Picks, highlighting a handful of campaigns selected by Trump – though Trump said Zanker and his team are largely responsible for the selections.
“Bill (Zanker) will show me things, show me campaigns he likes,” Trump told the Business Journal. “In virtually all cases, I’ll approve.”
Donald’s Picks campaigns might get Trump money as well. Wyman and Zanker hope to bring in other celebrities to endorse campaigns, though wouldn’t release other names.
Along with hiring endorsers, Zanker wants FundAnything to work with celebrities to raise money for their own projects.
Carolla, who has 400,000 Twitter followers and one of the Web’s most popular podcasts, last week launched a campaign for “Road Hard,” a movie he is writing and producing.
To find more celebrities, FundAnything is hiring a team of salespeople with relationships in the film, television and music industries. The goal is to get big names to raise money through FundAnything rather than another site.
The company last month hired actor and musician Donovan Leitch, son of the British ’60s pop star of the same name, to lead its music sales team and attract big names.
“The sales force has to be out their attracting high-impact campaigns,” Wyman said.
Once celebrities are running campaigns on FundAnything, Wyman said the company will expect them to promote other campaigns as well. The idea is that both the celebrity-run campaigns and their endorsements of other campaigns will drive more traffic to FundAnything, providing more exposure and more money to all campaigns on the site.
“It all filters down to the little people who don’t have a celebrity following so they can have a little exposure, too,” Zanker said.
Celebrities command large and attentive audiences through Twitter and Facebook, but no celebrity can sell everything. MJ Eng, president of Santa Monica’s ShoeDazzle, said FundAnything’s celebrity-focused model will likely attract a crowd, but he cautioned that Zanker and company should make sure celebrity endorsers are promoting campaigns that make sense.
“The key is authenticity – whether there’s a true connection,” he said. “If it’s a product, are they using the product? Are they passionate about the business? If not, we’ve found clients and consumers see right through it.”
He said even polarizing celebrities who have as many fans as haters – Trump and ShoeDazzle’s Kardashian, for instance – can be effective if they stick to what they know.
“People will respect Donald Trump for the success he built in business. He’s a knowledgeable person in that space,” he said. “Kim might be polarizing in some aspects of her life, but she’s still respected for her fashion.”
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