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Retail Brew

Finance

Andrew Adam Newman

retailbrew.com

In late June, while much of the US sweltered under an early-summer heat wave, things were heating up at the crowdfunding platform Kickstarter, too.

, which is about the size of a microwave oven and claims to be the “first personal 3D-texture UV printer,” enabling consumers to print directly on a range of materials and objects, became the most funded project ever for Kickstarter.

The 60-day campaign, which had a $500,000 goal, ended on June 28 having raised $46.8 million, besting the previous record of $41.8 million by fantasy writer Brandon Sanderson, whose project involved publishing four novels over the course of 2023.

With the popularity of crowdfunding platforms like Kickstarter, Indiegogo, and GoFundMe, you’d be forgiven if you thought these platforms had been around for decades. But not so long ago these funding platforms for startups were themselves upstarts: Indiegogo launched in 2008, Kickstarter in 2009, and GoFundMe in 2010.

Among the brands that launched on Kickstarter are VR headset maker 

While the raison d’être for these platforms—raising cash to produce a product or project—is nothing to sneeze at, many brands who turn to them find that a well-run fundraising campaign delivers much more than capital. Founders who’ve had crowdfunding success also laud the direct (and often ongoing) connection they gain to consumers, critical feedback they receive in products’ early stages, and the sort of buzz that can lead to retail distribution.

Javon Frazier, founder and CEO of Maestro Media, which specializes in adapting popular IP and pop culture properties into tabletop games, is well known for his numerous successful Kickstarter campaigns.

, had a goal of raising $100,000 in 30 days and ended up raising $6.7 million, making it the 30th most funded campaign ever on Kickstarter. In all, Maestro’s Kickstarter campaigns have raised more than $15 million, according to Frazier.

“Kickstarter is a good platform to not only validate demand, but also showcase the product, and then go into retail after,” Frazier told Retail Brew.

While a moderately successful Kickstarter campaign can help get meetings with retailers for distribution, at least one of Maestro’s campaigns have been so successful that it has been retailers contacting them for meetings.

Shortly after that historic 30-day fundraising campaign for 

 in 2021, for example, “retailers were reaching out directly to us,” Frazier said.

Peak Design, which makes bags and gear for cameras and everyday use, completed its first successful Kickstarter campaign 

 Retail Brew in 2023, the company first used Kickstarter to pay for the production run of its first product (a 

 that could attach cameras to numerous items), with backers—as is typical with the platform—essentially pre-ordering it at a discount.

But, like Frazier’s Maestro and many other companies, long after his company was well capitalized and had no need to pass the hat for a production run, Dering found Kickstarter to be an essential marketing and sales channel.

“Kickstarter has been masquerading as something other than a sales channel for a long time, but it 

 a sales channel—and a great one,” Dering previously told Retail Brew. “Because it also comes with a way of creating closeness between the brand and the consumer that just doesn’t exist in any other sales channel.”

Kickstarter reports that more than 24 million Kickstarter users have backed projects, and more than a third of them have backed more than one project, which suggests that many early-adopter types are using the platform as a marketplace.

“What we’re able to provide for people who are bringing projects to the site is this audience of folks who are just genuinely curious about discovering new things,” Nick Yulman, Kickstarter’s director of outreach, told Retail Brew.

Kickstarter campaigns typically begin with an opening video, often a founder recounting the aha moment for the product, its attributes, and the challenge of bringing it to life, followed by updates about the campaign’s progress, and a stream of comments from backers and would-be backers.

“Kickstarter is a storytelling platform as well as a fundraising platform,” Yulman said. “That [initial] video, and the whole structure of laying out, like, ‘I have an idea, and this is why it’s important, and this is who I am, and this is why I want you to get involved,’ is really powerful.”

Since he’s well known for striking Kickstarter gold, Frazier said about 5% of the emails he gets on an average day are from founders who recently launched campaigns that are falling flat.

However, at that juncture there’s not much to be done because the key is to be strategic and pre-game a crowdfunding campaign, he said.

“The biggest common misconception about the platform is that people just say, ‘I’m just gonna launch on Kickstarter, and it’s gonna be successful,’” Frazier said.

“Having pre-buzz, pre-awareness, PR, the right imagery, the right reviews,” he continued, “all those things are important to be successful.”

“Kickstarter is a box office kind of thing, where you gotta have a big opening, and you gotta have a big closing, and making sure that you’re successful on Day One is part of the strategy.”

While the barn-raising ethic is alive and well on crowdfunding platforms like Kickstarter and Indiegogo, and companies have essentially pre-sold untold numbers of products, one thing you can’t do on the sites is offer shares and an ownership stake.

That’s where companies like DealMaker, a platform and consultancy that helps companies raise capital through online crowdfunding, come in. Enabled by the Jumpstart Our Business Startups (JOBS) Act that President Barack Obama signed into law in 2012, the law allows companies to seek investment from so-called “

“We’ve really created the next level of engagement where the customers are saying, ‘Yes, not only do I want to see this product get built, but I want this brand to be a part of my life,’” Rebecca Kacaba, CEO and co-founder of DealMaker, told Retail Brew. “‘I want to back this company; I want to actually be an owner in this company.’”

Unlike Kickstarter, which does not offer equity to campaign backers, DealMaker works with companies to offer shares in their companies.

At cocktail bar chain Death & Co, for instance, a 

 at the top of its landing page urges visitors to “Invest in Death & Co and become a part of our future,” and links to a 

 with several investment tiers that offer perks along with the purchased shares. Invest $200,000, for instance, and you’ll receive myriad VIP perks at the restaurants like priority reservations, drink discounts, special events, and even a cocktail party for up to 50 people.

So far Death & Co has raised $5.6 million through DealMaker, according to Kacaba. Among other retail brands that have raised money through selling shares with DealMaker:

, the automated window shade and curtain brand, raised $9.4 million.

As novel as everyday consumers investing in their favorite brands may seem now, Kacaba predicts it will be commonplace soon enough.

“Three years from now, you’re going to walk into a grocery store, turn over your favorite bag of chips, scan a QR code, and become an investor,” Kacaba said. “We are making investing part of people’s everyday lives, and that is how you interact with the brands that you love.”

Kickstarter's home page on a phone screen in 2012. 

How crowdfunding changed everything

Platforms like Kickstarter helped launch Allbirds, Peloton, Brooklinen, and more.

Katishi Maake

The writing has been on the wall for Bed Bath & Beyond, and the company 

 for Chapter 11 bankruptcy protection on Sunday.

All 360 Bed Bath & Beyond locations and 120 Buy Buy Baby locations will close “eventually,” per the Wall Street Journal. Sixth Street Partners has offered $240 million in financing to usher the company through liquidation.

The company has struggled for years at this point. Attempts to 

 to its executive leadership couldn’t jumpstart Bed Bath & Beyond from its difficult, low-cash financial position. The final gasps came in January, when the company 

 it could file for bankruptcy if it wasn’t able to shore up cash for suppliers and lease agreements.

On that news, the stock reached its lowest level in roughly 30 years.

Under former CEO Mark Tritton, Bed Bath & Beyond attempted to whittle down its product selection and lean into private labels early in the pandemic. This was exemplified by its NYC flagship, which 

 in July 2021 and prominently featured newly minted private label brands such as Simply Essential, Wild Sage, Nestwell, and Haven.

At the time, Bed Bath & Beyond planned to spend $250 million over the following three years to remodel stores in a similar fashion.

However, supply chain shortages caught up to the company. During the 2021 holiday season, it lost out on $100 million in sales due to stock shortages.

 Bed Bath & Beyond will now liquidate its remaining stock and has placed its landlords in a difficult position, as they’re dealing with high interest rates that elevate borrowing costs, the WSJ noted.

Store closing sale announcement at a Bed Bath & Beyond indoor mall in northern Idaho

Bed Bath & Beyond’s bankruptcy was only a matter of time

All 360 Bed Bath & Beyond locations and 120 Buybuy Baby locations will close “eventually,” per The Wall Street Journal.

Apple is, to put it mildly, making moves. Days before the tech behemoth was set to 

 its first stores in India, it unveiled a high-yield savings 

The news grabbed attention on Twitter, given the generous 4.15% annual interest rate. Users can open the account on the iPhone Wallet app, but also need to have Apple’s credit card.

 The announcement comes shortly after Apple 

 its long-delayed buy now, pay later service, Apple Pay Later, late last month.

None of this comes as a surprise to Jennifer Stevenson, senior director of product strategy  at Uberall, but she says Apple isn’t just taking a shot in the dark.

“Apple does things very methodically, and they’re very thoughtful,” she told Retail Brew. “When they go into a space, they’ve looked at every angle on it.”

One analyst from Bankrate told CNN that Apple’s high-yield savings account could even 

 customers to move their money from big banks like Chase and Bank of America, which offer a 0.01% basic savings rate. Plus, it’s an opportunity to further drive loyalty for the company’s suite of other products and services.

As for BNPL, Stevenson believes Apple has a chance to carve out its own space, even in an increasingly saturated market with first movers like 

But even Klarna is rapidly diversifying its services, 

 new shopping tools as the BNPL space becomes increasingly crowded.

Stevenson said Apple’s entry could make it increasingly difficult for BNPL companies to compete.

“They are going to need to understand where that white space is, where they offer something that Apple Pay [Later] isn't offering in the consumer journey,” she told us.

Finance

How crowdfunding changed everything

Bed Bath & Beyond’s bankruptcy was only a matter of time

Apple plants flag in finance world with high-yield savings account, plus buy now, pay later

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