With small business funding still tight, toy maker GoldieBlox focused on crowdfunding to launch its products.
In last night’s Super Bowl game, GoldieBlox, a company that creates construction toys specifically for girls to encourage them to pursue careers in science, technology, engineering and math (STEM), debuted a commercial. Brands advertising during the Super Bowl isn’t uncommon, but it is for a small business such as GoldieBlox when the price tag for a commercial can reach upwards of $4 million.
Thankfully, GoldieBlox didn’t have to shoulder the costs as they were the winner of Intuit’s Small Business Big Game contest that awarded one small business a free commercial spot during this year’s Super Bowl. As you can imagine, thousands entered and after a six-month process, GoldieBlox was awarded with the honor of advertising their products to the over 100 million Super Bowl watchers.
From the outside looking in, GoldieBox is extremely lucky, but it actually took more than luck to reach the level of success they’ve achieved so far. When company founder, Debbie Sterling came up with the idea of GoldieBlox, she received tons of resistance from the toy industry who said her toys would never go mainstream. She was also faced with how to fund GoldieBlox, and that’s when she launched a crowdfunding campaign to cover the costs of producing the toys. Through Kickstarter, a platform that allows budding entrepreneurs to raise funds, Debbie rallied over 5,000 people to pledge almost $300,000 to GoldieBox.
If you’re unfamiliar with crowdfunding, it’s when groups of people invest, often small amounts of money, to get a project going. In our 5th annual eDNA of an Entrepreneur survey, many reported that they had not used crowdfunding, but crowdfunding may soon be a lifeline for small business owners as traditional funding is still tight. With the passing of the JOBS Act last year, small businesses can begin using this alternative form of funding to advertise that their start-up is seeking investors.
While your crowdfunding campaign may not be as successful as GoldieBlox, it doesn’t hurt to try this strategy to fund the launch of your small business or to help it grow. Has your small business used crowdfunding or are you considering it? Leave us a comment or connect with us on Twitter to share your thoughts on small business and crowdfunding.