Renee Joneck wanted a local wine bar as comfortable as her living room. And when she couldn’t find one after moving to Arden Arcade, she decided to create it. Joneck drafted a business plan and looked into different loan options for funding, but either didn’t qualify or didn’t like the terms and conditions. So she tried another option: Kickstarter.

The crowdfunding website appeals to businesses without the means to cover start-up costs. Joneck launched her campaign to raise $50,000. Backers who contributed $50 to the wine bar were rewarded with pink baseball caps. But there’s a catch. Kickstarter is all or nothing. Projects either hit their goal within 30 days or receive zero funds. For a month, Joneck promoted the campaign on social media, reached out to friends and even got a write-up in the Sacramento Business Journal. It wasn’t enough. The project failed to hit the goal and went unfunded. 

“I’m always shy and uncomfortable asking people for money anyway, so it’s hard to sell yourself,” Joneck told me. Only a little over four out of 10 campaigns reach their fundraising goal, according to Statista. For Joneck it was worth a shot. Kickstarter only takes a 5 percent cut from successful campaigns, plus another 3 to5 percent for payment processing. The fee for an unsuccessful campaign is zero. A funded Kickstarter meant fewer permit fees for Joneck to pay out of pocket. 

Instead, the East Sacramento wine bar opened for business in April primarily financed by Joneck and her husband cashing out a portion of their 401K accounts. For the new bar owner, crowdfunding was a learning experience. Most successful Kickstarters raise less than $10,000, far less than what she needed to open Joneck’s Wine Bar. “Kickstarter, it’s not for the startup path,” Joneck says. “If you need something for a one-off instance, a piece of equipment, or to pay a permit cost that you hadn’t anticipated, that’s what you use it for.” 

Crowdfunding attracts people who have invested time in creating an idea but not the money to manufacture it. The most popular Kickstarters have been for tangible goods like gadgets and games. Rachael Kinner is a part-time writer and illustrator, part-time campground host from Placerville. Her first Kickstarter two years ago was to fund the printing of a tarot card deck. To reach the $3,000 goal, she offered backers a sticker for $30, a signed art print for $70, the full deck for $85, a custom-created card for $150 and all rewards together for $250. Kinner’s expectations were pretty low at the time. She thought most contributors would be “friends who took pity on me.” But she hit the deadline with 389 people pledging a total of $37,255. 

“It was just a very strange couple of months,” Kinner says about watching the backer numbers go up. Success felt amazing and at the same time overwhelming. “When you look at it, 400 people, that’s not so many. But when you have to mail out 400 packages, that’s a lot.”

The cards were a fun side project for Kinner. At the time she was working toward publishing her first novel. At 22, with no industry connections, finding a literary agent proved difficult. So Kinner went the self-publishing route. It costs nothing to publish an ebook to Amazon, which also offers print-on-demand services for customers who do want a physical copy. Kinner didn’t do that at first. She launched another Kickstarter. Why? The simple answer is exposure.

Kinner uses crowdfunding to promote her books. She has built up a customer base on the platform and launches new campaigns as a way to line up pre-orders, with the 30-day time limit and exclusive backer rewards as added incentives to buy. The money raised pays for the book to be professionally edited. “So you’re not spending the first two years of your book’s life just repaying back your editing costs, you know?” Kinner says. Instead, she can recuperate expenses upfront and profits from any books sold afterward. 

Thomas Fulenwider, an electrical engineer from West Sacramento, uses crowdfunding to turn his tinkering into “a positive net hobby.” His first Kickstarter campaign bought him a laser cutter machine. Backers in return received rubber band-powered toy guns made with laser-cut wood. Recent campaigns were for his CobraPin Pinball Controller circuit boards. Fulenwider uses crowdfunding to make the boards cost-effective by getting the money to mass-order parts.

Fulenwider thought crowdfunding was an “interesting social experiment” when he first heard about it because “why would perfectly normal people go online, find somebody they don’t know and give them money for a product they haven’t made yet?” But to entice backers, campaigns deploy pitch videos, compelling writings, concept art and a cost breakdown. Then to keep them from canceling takes attentive responses to comments and questions. ”This is not quick and easy money,” Fulenwider says. 

Creators come to Kickstarter because “it’s a great advertising platform when people don’t know you,” Fulenwider told me. It’s a place where new businesses can start building trust with a clientele. Crowdfunding can also be used to gauge genuine customer interest in a product. “It allows creators to test the market. No harm done if you don’t meet the goal. You can just walk away,” Fulenwider says. But if the goal is met, then the product better ship (eventually). “The community will destroy you if you don’t deliver.”

In 2014, two men successfully raised nearly $28,000 on Kickstarter to launch the Save Point Tavern, billed as “the first tabletop and gaming bar in California’s capital city.” One backer contributed $4,500 to have a private party at the bar. But it never opened. Updates posted to the campaign page announced kitchen equipment was purchased and a property renovation was underway. The owners wrote in a now-deleted Facebook post two years after the campaign that they encountered problems with a contractor and had to find a new venue, the Sacramento Business Journal reported. It’s unclear what exactly happened. The owners didn’t respond to requests for comment. 

Two campaign backers told me they never received refunds and don’t know if anyone ever did. Ben Haskett contributed $25 and wasn’t too upset about it going to a failed business. “There is a certain amount of … grace that backers extend to project creators,” Haskett said via text, adding: “I think they had big ideas and messed up the execution. They ran out of money and disappeared, but I do not believe that was the intended result.”

David Pulcifer contributed $850 for two different rewards, which included having his likeness used in one of the tavern’s logos. He saw a few rough drafts from the artist, but it was never completed. Pulcifer gave the money knowing the risks. He never asked for it back but wishes he knew what happened to the Save Point Tavern. “I don’t have enough information to judge either side of it, but it definitely sucks,” Pulcifer texted. “But I’m the kind of person who’s willing to invest in dreams, and am careful not to invest anything I’m not ready to lose.”

A 2015 study surveyed nearly half a million backers and found 9 percent of Kickstarter campaigns fail to deliver their promised rewards. “That’s put a little sour taste in a lot of people’s mouths,” says Jason Poole, co-owner of Midtown Spirits distillery. But he understands the hurdles projects can face. When it comes to crowdfunding, no one has received more attention from the Sacramento-area press than Poole. Before becoming The Brine Boss (“It’s been a while since that name has been brought out,” he says) Poole was a broke bartender who wanted to turn his hobby into a business. As his first business Preservation & Co. grew, Poole wanted to open a production facility and storefront in Midtown for his pickled vegetables and Bloody Mary mix.

“That obviously doesn’t happen with the $108 I had in my bank account,” Poole says. He didn’t have the investors or the credit to secure a loan. So he launched a Kickstarter campaign in 2013 when the concept was novel to the general public. He raised about $14,000, but it wasn’t enough. Most of the glass jars he sent to backers as rewards shattered in the mail. A chunk of change was spent on replacements, now with specialized packaging. Poole also underestimated other project costs. 

“No one ever launches a Kickstarter thinking they’re going to need a second one,” Poole says. But that’s what he did. His second campaign raised another $22,000. All that money helped, but it would never cover everything Poole needed. “It helped us get to the next step,” he says. He doesn’t know a single start-up that launched under budget ”because no matter what, there are things you just don’t think about.” Poole says the amount the average small business owner can raise from crowdfunding can get them through the conceptual phases of a project and become more attractive to traditional forms of financing. For Poole, crowdfunding helped get his name out there. “If nothing else, it was good advertising in the beginning.”

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