Crowdfunding Art, Science and Technology : A Quick Survey of the Burgeoning New Landscape by David Marlett JD, CPA Executive Director, National Association1 Research Fellow, ArtSciLab2 at the University of Texas at Dallas

As is commonly known, the number and scope of traditional funding sources for art and research has been declining over the past decade.3 Thankfully there is a new, dynamic player on the field: crowdfunding, and it is growing exponentially, hand over fist in international market size and strength.4

Crowdfunding (Cf)

Crowdfunding is the innovative use of the Internet and social media to fund an endeavor through the receipt of small amounts of monies from a wide number of people. It has proven rigorously successful, especially for type-specific fields such as gaming, tech innovation, and film. The largest international portals include Kickstarter5 (US-based), Indiegogo6 (US-based), and CrowdCube7 (UK-based). Independent research firms (e.g. Fung Institute at UC Berkeley’s Fung Institute) estimate the crowdfunding market ranges from $4B to $5B as of the end of 2013.8

The art-science-technology community should take note: the majority of those billions went to the funding of artistic endeavors (films, music,

1 www.NLCFA.org 2 www.artscilab.utdallas.edu 3 Larkin, Marilynn (2013). How to Use Crowdfunding to Support your Research. Elsevier Connect. 4 Ingeno, Lauren (2013). Crowdfunding Academic Research. Insider Higher Ed, June 10, 2013. 5 www..com 6 www.Indiegogo.com 7 www.Crowdcube.com 8 Best, Jason, Neiss, Sherwood, Stralser, Steven, and Fleming, Lee (2013). How Big Will the Debt and Equity Crowdfunding Investment Market Be? Comparisons, Assumptions, and Estimates. Fung Institute for Engineering Leadership, UC Berkeley College of Engineering. etc.), tech innovations (3-D printers, mobile phone accessories, etc.), and software launches (games, apps, etc.).9

Academic Crowdfunding (ACf)

As a significant portion of crowdfunding success has originated from higher-education students, many universities now encourage, if not facilitate, some form of crowdfunding. This is academic crowdfunding (ACf) is primarily achieved as curated/partner pages in the name of the university on portals such as Kickstarter or . Worldwide over fifty colleges and universities have such pages, including MIT10, Columbia11, Stanford12, Duke13, and the University of Edinburgh14.

Crowdfunding of Academic Research (Research-ACf)

Further, ACf is now making a strong appearance in faculty research funding.15 In the United States, leading portals for Research-ACf include Experiment, Kickstarter, Indiegogo, and Rockethub.16 Non-U.S. universities are also moving to integrate Research-ACf, such as the partnership17 between Melbourne’s Deakin University and the Australian platform Pozible18, and the University of Edinburgh and the Scottish platform ShareIn19. Through these, an efficacious element to Research-ACf has been observed: the focus shifts perceptibly from outcomes to process.20

9 Mollick, Ethan (2013). The Dynamics of Crowdfunding. Journal of Business Venturing, 29, 1-16. 10 www.kickstarter.com/pages/mitmedialab 11 www.kickstarter.com/pages/columbia 12 www.kickstarter.com/pages/storyviz 13 www.indiegogo.com/partners/duke 14 www.business-school.ed.ac.uk 15 Chopp, Natasha, Condellone, Patience Graybill, and Weinberg, Jerry (2013). Navigating the New Frontier in Research Funding and Administration, NCURA Magazine, Oct/Nov 2013, 32-24. 16 Smaller ones include Petridish, Scifundchallenge, and Crowdtilt. 17 Ingeno (2013). 18 www..com 19 www.ShareIn.com 20 Watters, Audrey (2012). Crowdfunding’s Next Frontier: Academic Research? Inside Higher Ed, April 12, 2012.

Universities engaging in Research-ACf21 have generally pursued one of three methodologies22:

First: Faculty utilize the same partner page that is also being used for student projects. (e.g. MIT Media Labs23 and Wharton24)

Second: The university enters an set agreement with the portal for their Research-ACf effort—an arrangement more refined than the partner page option. (e.g. Experiment’s partnerships with Tulane25 and the University of Washington26)

Third: The university hosts a private crowdfunding portal for its students/faculty, often using white-label software such as USEED27 or Launcht28. (e.g. Colorado State University29, Arizona State University30, Cornell31, and the University of Virginia32)

Regardless of which method is implemented for Research-ACf, the mission will commonly fall within one of three categories: (1) funding full experiments/research endeavors; (2) purchasing equipment/software; or (3) supplementing existing studies 33. (e.g. the 2013 campaign of Dr. Priscilla Cacola at the University of Texas-

21 As opposed to faculty simply listing their own research projects on a crowdfunding portal without the express approval, or in some cases knowledge, of their university. 22 Each of these methods has its benefits and its limitations, but such an analysis is beyond the scope of this article. 23 www.kickstarter.com/pages/mitmedialab 24 www.indiegogo.com/partners/WSII 25 www.experiment.com/institutions/tulane-university-school-of-medicine 26 www.experiment.com/institutions/university-of-washington 27 www.useed.org 28 www.Launcht.com 29 www.biz.colostate.edu/charge 30 www.asu.useed.net 31 www.cornell.useed.net 32 www.uva.useed.net 33 Larkin (2013). Arlington, utilizing the Experiment portal to supplement approximately $3,000 toward her Developmental Motor Cognition Lab34.)

Finally, an important synergistic benefit for academic and art crowdfunding arises in the amounts sought. Industry opinion advises capping typical raises at $10,000. This appears optimal for Research- ACf because, according to a recent study, “$10,000 per fundraising campaign [is] an ideal amount for funding a pilot study, purchasing equipment for an existing study, or a summer of graduate student research.”35

Complexities Await

Though crowdfunding is a time-intensive tool36, and not appropriate for all academic research, evidence shows it can be an efficient method for raisings funds. As the academic and art research community continues its steady growth toward crowdfunding, new opportunities will arise such as crowdfunding scholarships…while unavoidable issues will arise such as tempestuous IP matters37; coordination with university grant funding38; alumni lists; liability mitigation; the onset of equity crowdfunding in the United States39 as well as its explosive use internationally through portals such as CrowdCube40 (UK), OurCrowd41 (Israel), ASSOB42 (Australia), and Invesdor43 (Northern Europe); and the impact of crowdfunding on the choice of the research and its methodologies, and whether such impacts are a net positive or net

34 Nagy, Monica (2013). UTA Researcher Fights for Children with Severe Motor Difficulties. Star-Telegram, August 18, 2013. 35 Wheat, Rachel, Wang, Yiwei, Byrnes, Jarrett, and Ranganathan, Jai (2013). Raising Money for Scientific Research Through Crowdfunding. Trends in Ecology & Evolution, February 2013, Vol. 28, No. 2, Page 72. 36 Larkin (2013). 37 Chopp (2013). 38 Larkin (2013). 39 Schwartz, Andrew (2013). Crowdfunding Securities, Notre Dame Law Review, Vol. 88:3, Pgs.1457-1490. 40 www..com 41 www.ourcrowd.com 42 www.assob.com.au 43 www.invesdor.com negative to the integrity (perceived and otherwise) of academic research. We leave these issues to another paper.

CrowdFormation

Here at the University of Texas ArtSciLab, we have started a crowdfunding and crowdsourcing initiative, CrowdFormation44 and we look forward to sharing expertise and experiences.

44 www.CrowdFormation.org