Crowdfunding for Authors: A Profitable Business?
Crowdfunding can be a valuable tool for authors that are looking to fund their writing projects, whether it’s a novel, non-fiction book, poetry collection, or any other literary endeavor.
The publishing industry is becoming highly digitized, and with it, crowdfunding is becoming an increasingly popular tool that is rewarding for authors, publishers, and platform owners.
For authors, crowdfunding allows to raise funds from a large number of people who are interested in reading the book and also to build a community of supporters around their work. It is normal for backers to be sincerely interested in the projects they fund, and they can become strong advocates for the author and the book.
Along with helping to build a community, crowdfunding campaigns are a great tool to create buzz and boost interest in a book even before it is published. Moreover, most specialized crowdfunding platforms offer authors marketing support, and some, such as Publishizer, even query their acquiring editors to help authors with publishing.
For publishers, it is an opportunity to get carefully selected drafts of books. Publishers often face the challenge of identifying potential bestsellers and nurturing emerging authors. Crowdfunding platforms allow authors to showcase their work, gauge reader interest, and secure funding directly from their target audience. As authors promote their campaigns, publishers can monitor which projects gain traction and resonate with readers.
Finally, launching a specialized crowdfunding platform for authors empowers writers to fund projects, promotes diverse voices, fosters community, and offers revenue opportunities while contributing to literary innovation and data insights. However, it requires careful planning and expertise.
What you will learn in this post:
Decide on the type of a crowdfunding platform for authors
To start with, decide what crowdfunding type you want to use. There are four main types of crowdfunding platforms:
Lending and equity-based models are more suited to raise funds for a B2B project or a project that promises to deliver significant returns in the future. For creative projects such as a book, reward-based crowdfunding is more suitable.
Choose crowdfunding software
To facilitate and speed up the development of the crowdfunding platform for writers, you may want to consider using white-label crowdfunding software from LenderKit. With them, you can set up an industry-specific crowdfunding platform relatively quickly and without excessive expenses.
The white-label solutions come with a comprehensive set of out-of-box features needed for a platform operation. The crowdfunding software to raise capital for authors can be fully customized based on your business needs and to comply with the regulations in your region.
LenderKit offers a set of marketing site layouts that enable you to set up your website quickly. An interactive portal for users allows fundraisers to easily create campaigns, and investors – to invest.
Finally, a powerful back office allows the admin to manage all the investment processes, set up fees, create and assign roles, and more.
To find out how the product works, you can schedule a demo, and to discuss what solution will suit best for your business, please contact the sales team.
Prepare to launch your crowdfunding platform
To take a leadership position in the niche, you need to consider some more details, before launching a crowdfunding platform for creators, authors and writers.
Pick suitable projects
There are many authors, but not all of them have the talent and skills to write a successful book. Only 1-2% of authors get published, and not all of them are successful afterwards.
If you allow everybody to launch campaigns, the success rate will drop, and it impacts the platform rating in a negative way. To prevent it, you will have to hire a team of knowledgeable editors to select only the projects that are more likely to be successful.
Find acquiring editors at leading publishing houses
To make your platform more attractive for authors and investors, you may want to contact acquiring editors at leading publishing houses and query them whenever there is a promising author raising funds on your platform. For a platform owner, it is an additional opportunity to attract more talent and investors.
For editorials, it is profitable because they save time and money by getting books that have the funding needed for publishing and supporters who have pre-ordered the book copies.
Monetize the crowdfunding platform for authors
There are several ways to earn on projects placed on your platform:
- You can charge a percentage of the amount processed by the platform.
- You can apply a model with tiers where investors get a percentage of the author’s income from the book sales, depending on the investment tier.
- Or you can sign a contract where the author is obliged to pay you a percentage of royalties received from the book sales.
Additionally, you can offer assistance with marketing, manuscript creation, author branding, and other promotional activities for additional costs.
Explore the best crowdfunding platforms for authors
There aren’t too many dedicated crowdfunding platforms for authors, however, there are definitely the ones that dominate the niche. Most of the time, bigger crowdfunding platforms like Kickstarter would have a separate section dedicated to authors, however, creators-focused crowdfunding platforms also exist.
Unbound is not just a crowdfunding platform but a crowdfunding publisher whose editors pick the best novels and present them to investors. This is why there are not many books that are approved for raising funds there, and the platform has a long list of genres for which submissions are not accepted.
While the requirements are strict, authors who manage to comply with them get not only funding but also readers who are interested in this type of content.
Each author signs a contract with the platform, according to which Unbound gets half of the profit made by the book.
Publishizer is a crowdfunding and literary agency that helps authors get funding for pre-ordered copies of their books as well as land the first publishing deals.
An author submits a book proposal that is reviewed by the editorial team of the platform. Once the book proposal is accepted, the author can create a campaign, market the book, offer bonuses, and raise funding from potential readers within 30 days. Readers can fund pre-ordered copies and publishers – get in touch with the author to discuss further collaboration.
Once a pre-order campaign is over, Publishizer queries publishers:
- If a pre-order of 500 copies at $20 is reached, Publishizer queries their acquiring editors at traditional publishing imprints and provides high-level support on the manuscript.
- If a pre-order of 1,000 copies at $20 is reached, the platform queries their acquiring editors at Big Five publishing houses.
An author can choose to self-publish, but it rarely happens.
The platform charges 30% of all funds processed and a 2-4% PayPal fee.
Crowdfunding for authors helps talented writers to get the needed resources to not only get their books published but also to gather a supportive community ready to provide help continuously and get valuable contacts. There are not so many platforms working in this niche, and thus, creating one would be beneficial not only in matters of earnings but also to help talented people unveil their talents.