Diary of a Start-Up: Fundraising Tactics
BY Dan Chilton
In a recent New York Times article about the founders of CollegeHumor.com, Rufus Griscom, the chief executive of Nerve.com, was asked why he thought the young entrepreneurs had been so successful. "Their age is key to their success not only because they are their demographic, which is always good, but because they are willing to do wacky things. They have a healthy obliviousness to the way everybody else is doing business." After reading the article, I immediately felt a bond with the young businessmen. In many aspects, Nicole and I are in the same boat. We're young, blissfully unaware of the "standard" way to run a business, and willing to try new and innovative ways to fund our venture.
For instance, when The Moxie was initially faced with a financial shortfall back in April, we did what most level-minded entrepreneurs wouldn't - we auctioned off the naming rights to our theater's concession stand, the Cinebar, on eBay, as mentioned in last week's post. After a week's worth of fevered bidding, mostly between my loyal blog readers, the Cinebar's namesake went to a local freelance advertising consultant. Many people viewed the eBay auction as nothing more than a marketing ploy, but the end result was well worth the effort. We came up with the added capital we needed, and a local business received a year's worth of targeted advertising for a fraction of the cost he would've paid elsewhere.
Late last week, The Moxie found itself in a similar financial predicament, so we decided to employ yet another unorthodox fundraising campaign -- giving away FREE MOVIES FOR A FULL CALENDAR YEAR to a select number of Moxie enthusiasts, known collectively as Founding Members. Having made it this far on the road to opening our theater (we're literally only a few thousand dollars away), we had to come up with a way to bridge our financial gap. Giving up has yet to cross our mind, and this recent roadblock was no different. Like the eBay auction, many people think we're literally out of our minds. How can you give away a year worth of movies and expect to make any money? The answer is concessions. Concessions and practical economic modeling.
As with most movie theaters, our main profit center is in concessions. Giving away free movies helps us bring in more customers -- customers who, without the incentive of seeing a free movie, may not have come in as often -- and as long as we hold up our end of providing second-to-none service, that increased foot traffic should equate to even more valuable word-of-mouth advertising.
The membership drive will be going public this week, and, with the help of a few local business-specific mailing lists, I hope it turns out to be a huge success. My non-advanced age may not lend itself to stunning business acumen, but I've learned enough to know that the movie-going public will take a killer deal when they see it. That's why we call it Moxie!