These days, seemingly everyone and their mother has a crowdfunding campaign, on platforms such as Kickstarter or Indiegogo, to help raise money for various projects. Some are practical, like raising money to open a new music store, while others are goofier — like building a statue in RoboCop's likeness to, well, making potato salad.
Patronicity is a Michigan-centric platform operating out of the Green Garage, a Cass Corridor workspace (they got on our radar by launching the campaign to raise money for coffee table book for the now-defunct Detroit rag Orbit). They currently have five live campaigns, and have funded 10 so far, with 60 more in the pipeline. The project was dreamed up by Chris Blauvelt, 30, originally from Massachusetts and a U-M alum who now serves as the company's CEO. Also working on the project is Ebrahim Varachia, 24, originally from South Africa but who grew up in suburban Detroit and is also a U-M alum, and serves as the company's president. We met up with them at the Green Garage to learn about what they do.
Metro Times: When did you start Patronicity?
Chris Blauvelt: I initially had the idea about three years ago. I used to be a film producer here in Detroit. We had a film that went to Sundance (Bilal's Stand), and we needed to raise some extra money for it, so we went to Kickstarter. After that, people would come to me for advice on how to do Kickstarters and crowdfunding in general. One of the cool things I found out about crowdfunding is there's so much viral and organic media that comes out of a crowdfunding campaign that companies would normally pay tons of money for. I had this idea of a crowdfunding platform which could combine sponsorships with crowdfunding — so if the Detroit Opera House wanted to raise $50,000, Lincoln Motor Company could match that $50,000, and it would look good for them because they'd get all this publicity.
Dan Gilbert has this incubator program called Bizdom. They had a night class program, and I started doing that as a film producer. (My idea) eventually morphed into more of a local crowdfunding platform. I still wanted to have the sponsorships, but I realized [that] without some community, the sponsorships were meaningless.
We built this local crowdfunding platform, Patronicity. Ebrahim joined last year. We had a lot of small projects locally, but it really wasn't catching on like we were hoping. Then Ebrahim got in a car accident, really serious — he was in the ICU for six weeks. Everything started to slow down, and it seemed like it was time to retire Patronicity. But then the state of Michigan reached out. Actually, they returned a call like six months later. They were interested to use crowdfunding to boost civic engagement with development of public spaces across the state. We spent some time developing that partnership, and we launched "Patronicity 2.0" this past June. And that's been the focus: More civic projects, and more sponsorships, like the MEDC [Michigan Economic Development Corporation]. It's been more successful than we anticipated.
MT: Is that a requirement, that you have to be based on Michigan to use it?
Blauvelt: It is, currently. But it's changed. Last year, it was a requirement that you had to be in Detroit. This year, you have to be in Michigan. Hopefully next year it will be like you have to be in the Midwest or something. A lot of the philosophy behind the Green Garage has affected our own philosophy for our business. Staying sustainable — that's one of the things they teach you [here]. Grow slow, but in a sustainable manner. Right now, we prefer just to be local, so we can be hands-on with everything we're doing.
MT: Why should someone use Patronicity over Kickstarter or Indiegogo?
Blauvelt: The simplest reason is that with us you'll get personal support. On Kickstarter, you're one of thousands of projects. Kickstarter doesn't have an approval process, so you can just put it up, and it's just a tool. We're a tool with a coach. We really help projects get polished up, and figure out the giving levels and rewards and incentives for donations. Since launching the new Patronicity, we've had only one project not reach its goal. The example I like to give is that crowdfunding is like riding a bike — it's not hard to do, but if you don't know what you're doing you're probably going to fall down the first time. In general, 90 percent of first-time crowdfunding fails. I like to call us the training wheels for people.
Beyond that, I think there's a deeper reason to choose Patronicity. Investing in our local economy and sharing those stories locally is one of the most important things we can do to bring ourselves up. It's the idea of cultivating those stories in one place where people can see all across Michigan, people are really engaged in their communities, and they're really taking a stand for themselves and working together. A cool thing that ends up happening is this sort of cross-support. We support an arts center project in Lansing, and then a bunch of people donate to that, and then we send an email out — here's another project in Lansing, or here's another arts center, but this one's in Detroit — and all of a sudden you start exposing people with similar interests to new audiences.
MT: It seems like the interest in crowdfunding has increased exponentially over the past few years. How do you have a successful campaign with all the competition?
Varachia: The most important thing is your network. That's something you have to build — you can't just get that overnight. Spreading the news among your own people, and having a team, is so important. Teams branch out the amount of people you can reach. You can't launch a project overnight. You have to lay the groundwork, and make sure all your ducks are in a row to know what you want to do.
Blauvelt: I think most people, they look at crowdfunding, and they hear about it on the news from projects like the RoboCop statue or the potato salad Kickstarter. The reality of it is, that's not representative of crowdfunding. Most crowdfunding is not magic. If it was successful, like Reach, this arts center in Lansing — they've been in the community for years, they have an active Facebook page and email list, and a volunteer base of dozens of people. They've impacted hundreds of families over years. So it's not like when they do crowdfunding that they're reaching out to nobody. They're reaching out to people who care.
MT: Business-wise, how does it work? Do you guys take a cut?
Blauvelt: Five percent, yeah. It's about the same as Kickstarter. It's a little less comparatively to Indiegogo. Indiegogo can be as high as 14 percent. So we need to get a big volume, but since we started working with the state of Michigan, we do get a big volume.
Varachia: I spoke yesterday to a grant writer. She said the secret is, it's not how good you write. It's who do you know. Which automatically means it's super-biased. With crowdfunding, it's taking away those barriers of entry if you don't know how to write. It's also giving the power back to you. Crowdfunding, to me, democratizes the access of capital. People have the opportunity to show that this is a project that not only do we want, but also hundreds of people who voted not by clicking a button but voted with their credit card.