Beauty Backer Is Launching The First Beauty-Specific Crowdfunding Platform
Self-professed amateur inventor Jacqueline Gutierrez wanted to bring her idea for clip-free extensions letting people easily dabble in different colors without damaging their hair to life, but ran into a common problem: money. She estimated it would take $30,000 to pay for the tooling required to manufacture the hair extensions.
Gutierrez, whose professional background is in technology product management and marketing, decided to explore crowdfunding options to secure the funds she needed for Color Crown, the name of her forthcoming hair extension business. She’d assisted with campaigns on Kickstarter and Indiegogo for calorie-tracking smartwatch Healbe and fitness mirror Naked, and figured perhaps they’d would be good fits for it. On Kickstarter and Indiegogo, however, Gutierrez couldn’t determine the right category for her concept. Was it arts? Was it design and tech? Was it food and crafts? Was it fashion and wearables?
Without proper categorization, she says, “I would spend an enormous amount on marketing to gain visibility, and it was really going to be a waste of my time. Then, I thought, ‘Maybe this isn’t only my problem.’ As I started to talk to other founders and understand their pain points, I realized that there was a massive gaping hole in crowdfunding that beauty was not being addressed. Nobody was really doing anything to support beauty brand founders.”
Gutierrez decided to create Beauty Backer to support beauty brand founders. Launching Sept. 26, the rewards-based crowdfunding platform will be the first of its kind specifically tailored to beauty entrepreneurs seeking capital to get products off the ground, and beauty enthusiasts excited to discover and bankroll the latest beauty innovations. It will kick off with eight beauty categories (makeup, haircare, skincare, men’s grooming, wellness, fragrance, technology and gender neutral) and four crowdfunding campaigns, including from fragrance brand Aroma M and skincare brand Lady Wolf Skincare.
Before successful campaigns pile up on Beauty Backer, Gutierrez acknowledges she’ll face trepidation from beauty brands wondering if they’ll be able to raise money on an untested platform, but believes they’ll ultimately conclude Beauty Backer is their best crowdfunding choice. “Look at the alternatives. It’s putting your campaign on a big crowdfunding platform that is not really designed for what you are selling,” she says. “If you put yourself on there, the odds are not in your favor. You are surrounded by technology products, and the audience is coming to find them. They are not coming to find you. At Beauty Backer, people are coming to find you.”
On Kickstarter, there have been 198 campaigns for skincare concepts and 43 achieved their fundraising goal, according to Gutierrez, leading to a success rate of almost 22%. Across all Kickstarter campaigns, the success rate is 37%. On average, a successful skincare campaign on Kickstarter had a fundraising target of less than $5,000. The skincare campaigns ran the gamut in terms of categorization. Primarily they were grouped in fashion and crafts, but they sat in arts, technology, and food and crafts, too. The female-centered platform iFund Women is another crowdfunding avenue for beauty brands, but it’s plagued by a similar categorization issue as Kickstarter and Indiegogo, and lumps beauty brands into lifestyle, tech, health and science, and social good classifications.
“I realized that there was a massive gaping hole in crowdfunding that beauty was not being addressed. Nobody was really doing anything to support beauty brand founders.”
For Beauty Backer campaigns, Gutierrez recommends brands attempt to amass between $15,000 and $30,000. However, she projects most campaigns will set a fundraising objective of between $5,000 and $7,000. There will be two campaign types on Beauty Backer. In a Now Or Never campaign, a brand won’t obtain funds if it falls short of its fundraising goal. In a FlexiFund campaign, a brand can obtain the funds it raised regardless of whether it hits its fundraising goal. Gutierrez says a brand may opt for a Now Or Never campaign if it can’t make a product unless it passes a certain funding threshold. She anticipates a reward valued at $25 to $50 for an introductory product kit will be customary for brands with campaigns on Beauty Backer to dole out to supporters.
Beauty Backer’s fee is 5% of the total a beauty brand accumulates through a campaign on its platform, and it will generate additional revenue by selling premium placement on its home page and in advertising. In its first year of operations, Gutierrez forecasts it can reach 500 campaigns per month. In contrast, Kickstarter and Indiegogo host roughly 5,000 per month. To build Beauty Backer’s infrastructure, Gutierrez tapped Thrinacia and instructed the firm to give its website an aesthetic that resonates with people accustomed to scouting beauty brands on Instagram and YouTube. She’s invested $60,000 so far to erect and market Beauty Backer, and is currently pursuing venture capital to help grow it.
Beauty Backer recently initiated Facebook ads. Within its core demographic of 18- to 44-year-olds for founders and 18- to 34-year-olds for backers, Facebook identified 26 million people globally interested in beauty and crowdfunding. In a survey of 500 people Gutierrez conducted to assess the market, she learned about 30% of 18- to 34-year-olds consider a beauty crowdfunding platform worthwhile. They are particularly interested in sustainable beauty and men’s grooming brands.
Gutierrez foresees better-for-you and inclusive beauty brands being prominent on Beauty Backer. “It’s very product-centric, and the campaigns are focused on gaining visibility, proof of concept and getting products in the hands of beauty lovers who are looking for products that are kind to their skin and the environment, really products that they can feel good about,” she says, noting she’s moved on to the prototype stage of her feel-good hair extensions brand Color Crown. “We believe that beauty is for everyone. In our mind, beauty transcends gender, race and sexual orientation. It’s really about what makes a person look and feel good. Because we define beauty that way, we expect our campaigns to be very reflective of that.”