Selling intangibles: using crowdfunding to launch non-product campaigns.

• Author: Bagley, Judd
• Position: Business Trends

In the world of entrepreneurial finance, there's a spectrum of options, ranging from credit cards on one extreme to venture capital on the other. While many options do exist in between, there have long been opportunity-limiting gaps separating them.

The internet's ability to aggregate disparate groups with niche interests has done much to fill in some of those gaps, particularly in the form of crowdfunding, as sites like Kickstarter and Indiegogo have arisen to provide a platform for the launch of many products with niche appeal. And, as some Utah entrepreneurs have demonstrated, crowdfunding can accommodate more than just product launches.

Hot off the press

In 2012, Desarae Lee, then a high school art teacher, had a booth at her first Utah Arts Festival and found herself confronted by the economics of yet another spectrum: the broad gap separating prices fetched by her pen and ink originals and their digital reproductions.

"I found that my originals were too expensive and the price I could get for digital reproductions was too low," Lee says. "I knew that if I filled that middle ground, I could make a living as an artist, which was my dream."

What Lee needed was a traditional printing press, able to produce works sellable as original reproductions at a price point able to both attract buyers and sustain her. But at over $10,000, a press was not a trivial purchase.

A mentor told her about the option of crowdfunding and how, if her campaign proved successful, she could offer original reproductions made on the press as awards to her backers.

"I made a Kickstarter campaign, which was nice because there's not a lot of upfront risk," she says. "Either you make your goal or you don't. It's not like getting a loan. You're selling work ahead of time."

Today Lee is proud to call herself a working artist, thanks to her press and the backers who financed it.

Relying on social capital

The major crowdfunding platforms require that projects culminate in the delivery of something the creator can ultimately show the world as "complete." This has tended to result in campaigns dedicated to financing the creation of shippable products.

But that's a narrow interpretation, according to Lindsey Elliot, co-founder of Salt Lake-based online adventure products retailer Wylder. When she needed financing to launch the Wylder marketplace website, Elliot knew there was only one viable approach.

"Ours was a unique use of Kickstarter, because we launched an idea instead...