The following article was originally printed in the Indy Star on August 7th and can be found in their archives here, for as long as they decide to host it:
Andy Meyer had a business name and logo but wasn't sure what to do next to realize his dream of opening a brewery. Until he found a website called Kickstarter.com.
It's where artists and entrepreneurs post their project ideas and turn to the masses for funding. Supporters pledge various sums of money in exchange for a product or just experience in this increasingly popular way of raising capital, known as crowdfunding.
For Meyer and his partner, Chris Hoyt, the site served as a launching pad to get the idea moving. After more than 100 contributors across the country pledged $21,328 by Aug. 31 -- surpassing Meyer's goal of $20,000 -- TwoDeep Brewing Co. hopes to open in Indianapolis by December.
"For a lack of better words, it was a kick to get us going," Meyer, 32, said of the site. "We've got all these supporters and all these backers now, and it really ignited us and charged us up to take the next step and get this thing going."
In the past few months, more and more people have turned to websites such as Kickstarter to fund their creative projects.
Kickstarter, the most prominent of several crowdfunding sites, has seen increasing success since its launch in April 2009, generating more than $75 million for thousands of projects.
Under the site's model, projects must reach their target amount of funding, or no money is exchanged. And 5 percent of the proceeds from successful campaigns goes to Kickstarter.
With a success rate of about 44 percent, the site has featured more than 26,000 projects, including a successfully funded Indianapolis-based workshop that coaches teachers in how to use author Kurt Vonnegut's work in their high school classrooms.
It has featured everything from artwork and albums to funky shorts made from fabric only found in Ghana -- a project dreamed up by Indiana University students.
The number of projects applying to the site is increasing each month, spokesman Justin Kazmark said.
Crowdfunding sites work by giving project leaders a set amount of time to raise a target amount of money. They give background information about their product or service on their Web page and set incentives for different levels of funding.
Meyer offered rewards that ranged from displaying in the brewery the names of those who pledged at least $1, to allowing those who pledged $2,000 or more to develop their own beer.
The Kurt Vonnegut Memorial Library, which led the Vonnegut workshop, offered rewards including mugs, T-shirts and passes to the library's parties.
Financial contributors have no true stake in the business: Unlike most forms of investments, they don't receive a cut of the profit beyond the promised incentive.
"It isn't a donation model, and it isn't an investment model. It's something in between," said Brian Meece, who co-founded another popular site, RocketHub.com.
The fact that it is not a loan and comes debt-free, Meece said, makes crowdfunding appealing to entrepreneurs.
"For a lot of entrepreneurs, they can crowdfund $5,000, $8,000 to start a food truck, a T-shirt company, a coffee or tea shop -- whatever it may be -- and not have to pay it back," Meece said. "They have to give rewards, but they don't have to worry about the debt, which is nice."
This means businesses that struggle to find more traditional means of capital could have a shot at finding the funding to get started and to build toward attracting investors, said John Talbott, assistant director of the Center for Education and Research in Retailing at Indiana University's Kelley School of Business.
It likely would work best for those trying to raise $20,000 or less and who have a unique product or experience to offer, said Jean Wojtowicz, founder of Cambridge Capital Management, which has helped fund and develop more than 1,000 small Indiana companies.
Instead of trying to gain the attention of Wall Street investors, Talbott said, the site allows for funding that comes from people who believe in a product and would like to see it prosper.
"People are really investing in you and some love of your product," Talbott said.
It's appealing to backers because they have a chance to connect with the project's creators and to play a part in the creation of the project, Meece and Talbott said.
Bryan Sebeck, a Canton, Mich., engineer, contributed $25 to TwoDeep Brewing Co. because he wants to see more breweries open and to feel that he played a small part in making that happen.
Sebeck typically sets aside about $25 each month to contribute to Kickstarter projects and has helped fund about eight projects so far.
"I do not individually have enough money to go and say, 'Let me help you start a brewery.' But if 150 people pitch in, you very quickly get to making someone's dream come true. And for $250, I've helped make eight people's dreams come true," he said.
"And for me, that's a great bargain."
Meyer will use the funding from Sebeck and his 102 other backers to offset building, equipment and licensing costs.
He said that without Kickstarter, his dream of starting a brewery likely would not have come this far. Now, he has a goal of opening by the end of the year, with supporters across the country.
"You hope that these people who support you show up in Indianapolis and you're able to one day raise a glass with them," he said.
Call Star reporter Brittany Shammas at (317) 444-6087.