InvestYYC: Lessons Learned from a Crowdfunding Platform
A look back on a platform that had trouble making its mark in a market dominated by Kickstarter and Indiegogo among others. Four years after its launch, InvestYYC, a crowdfunding platform dedicated to Calgary’s artists and arts organizations, announced that it was ceasing its operations until further notice.
- Platform name: InvestYYC
- Project type: crowdfunding platform reserved for cultural projects in Calgary
- Firm associated with its development: Katipult
- Financial partners : Alberta Foundation for the Arts, ATB Financial, Calgary Arts Development, Calgary 2012
- Country : Canada
- Activity period: November 2012–January 2016
- Fees: 7% of donations + transaction fees
2012–2013: A strong start
“InvestYYC was developed in 2012 as a bequest to Calgary during the year when the city was Canada’s cultural capital,” explains Melissa Tuplin, community investment officer with Calgary Arts Development, the agency to which the platform was bequeathed in 2013 and that was to see to its sustainable development.
The platform dedicated to Calgary’s artists and arts organizations was designed to showcase various projects involving culture, dance, film, literary arts, music and visual arts among others.
“One of InvestYYC’s differentiating elements is that it provided curatorship for the purpose of selecting projects,” adds Mrs. Tuplin. Projects’ viability and artistic merit were evaluated.
It is this curatorship combined with the enthusiasm following the 2012 celebrations in Calgary that made InvestYYC a vibrant platform. “There was a real community spirit around the platform. We experienced a great deal of success both in terms of the number of projects proposed and their funding,” recalls the community investment officer.
Two other factors contributed to the success of InvestYYC during the first years.
“Electronic income tax receipts were issued in exchange of donations, something that the other platforms do not provide,” explains Mrs. Tuplin.
But the incentive maybe did not go a long way with everyone. According to an internal survey, donors were not very motivated by the idea of an income tax receipt, but the incentive may have had an effect on major donors. For example, on philanthropists making a one-time donation of $10,000 to a project.
For Melissa Tuplin, another factor greatly contributed to the initial success of InvestYYC. At the beginning of 2013, Calgary Arts Development had announced its intention of matching the first $50,000 collected in donations through its platform. “Donors were very motivated by the prospect that their investment would be multiplied,” estimates the investment officer.
The $50,000 committed by Calgary Arts Development were distributed in less than two months and more than 30 projects benefitted from the initiative.
2014–2016: The collapse
In 2014, InvestYYC quickly began to collapse. “We observed a decrease in donations and project success rates as well as a sharp decrease in the number of artists who were interested in using the platform,” sums up Mrs. Tuplin.
She contends that several factors contributed to this decrease.
“The artists considered that the site involved a lot more bureaucracy than Kickstarter and Indiegogo,” she explains. As a result of the platform’s curatorship—although it had its advantages and was required given the tax incentives provided in exchange of donations—, launching a campaign could take up to one month.
“Also, artists needed to wait three months after their campaign ended before receiving their money,” says Mélissa Tuplin. Given the duration of the campaigns, artists were sometimes required to register with InvestYYC one year before their projects launched if they hoped to receive their money on time.
Furthermore, if the additional effort was worth the trouble when InvestYYC was launched given several donors visited the platform regularly, that was no longer the case later on.
The exodus of artists and donors obviously had an impact on InvestYYC’s results. InvestYYC funded more than 30 projects in 2013, 18 in 2014 and only 10 in 2015.
The platform was placed offline on January 1, 2016 after having enabling the collection of more than $500,000 over a four-year period.
2017 and beyond: What does the future hold for InvestYYC?
Although InvestYYC no longer accepts new projects, the platform continues to exist and Calgary Arts Development has no intention of getting rid of it. “We own the site’s backend code. However, we want to evaluate how the platform could be used on a larger scale than traditional crowdfunding,” explains Mrs. Tuplin.
The platform had already been used differently, namely to collect donations for Calgary flood victims in 2013. “It’s a quick way for us to collect money,” sums up the officer.
One thing is for sure: providing an Indiegogo- or Kickstarter-type service is not the solution. “We cannot compete against these platforms that are more intuitive and simpler to use and that propose more user-friendly timelines,” explains Mrs. Tuplin.
Regardless of the form that the next version of InvestYYC takes on, it will need to be more efficient than it was. “At the end, we were investing way too much time in the platform for the money that we were collecting through it. If the site is given a second life, we need to make sure that it is provides a more efficient and sustainable funding process,” believes the officer.
For Melissa Tuplin, a platform such as InvestYYC can serve several useful purposes within a community. All that remains now is to determine the new form that it will be given.