This Startup Raised $35,943,270 of Funding via 28 Kickstarter Campaigns

By Joseph Flaherty, Director of Content & Community

In an era where startups are mortgaging their futures for capital, a company called CMON stands out for raising $35,943,270M of non-dilutive funding on Kickstarter over the course of 28 campaigns. Think of CMON as a cross Warby Parker and Parker Brothers — it’s a Digitally Native Vertical Brand for board games. The fifty-person company has offices in Atlanta, Brazil, and Singapore; designs, manufactures, and sells games with titles like Zombicide and Blood Rage; and most recently crowdfunded an adaptation of A Song of Ice and Fire, the books that inspired Game of Thrones.

Most startups treat crowdfunding like a launch event. CMON uses it like a line of credit. While tabletop gaming and tech startups don’t have a lot of overlap, CMON’s unprecedented success in finding and exploiting an unusual, non-dilutive capital source is worthy of study.

Once Upon a Time…

CMON started life as CoolMiniorNot, a website modeled on Hot or Not, the Web 1.0 precursor to Tinder. Instead of rating headshots, hobbyists would upload pictures of painted miniature figurines used in Dungeons & Dragons campaigns. It was a place for enthusiasts to trade tips on crafty arcana, like the proper mix of green paint to get a perfect goblin skin tone. After building a surprisingly large audience, the site’s founders, Chern Ann Ng and David Doust, set up an ecommerce shop to sell paints, modeling putties, and other sundries to the socially awkward.

After a decade in business, the founders decided to make a game of their own. Partnering with industry veteran sculptors who understood the art of designing miniature plastic figurines, the team set out to publish a game called Zombicide which became their first crowdfunding campaign. Zombicide went on to set a record in the gaming category of Kickstarter and has spawned four sequels.

The Art of Stretch Goals

One of the secrets of CMON’s success is an aptitude for stretch goals paired with a manufacturing process that has high-fixed costs and a lower marginal cost structure. Making a metal injection mold for a Jamie Lannister figurine can cost tens of thousands of dollars, but the incremental cost of creating a new Khaleesi chit from a mold costs just a few pennies. CMONs core differentiator is stuffing their game boxes with hundreds of collectible characters. Stretch goals allow them to add new content to the game, in proportion to the backers willingness to spend.

Thinking Outside the (Game) Box

In addition to raising funds during initial crowdfunding campaign, the company has invested in custom software that fills gaps left by Kickstarter. Backers pay for shipping separately on CMON’s platform, which allows the startup to avoid paying fees to Kickstarter on those dollars. It also allows late backers to get in on the deal and for customers to top up their orders in the months after the campaign’s end. It’s simple sounding software, but important to the business. “It’s had a significant impact, and it is not unusual to see 20% additional revenue from our pledge manager,” says Ng. So the total raised via these campaigns may actually be closer to $42M.

After funding and delivering more than two dozen campaigns, and paying Kickstarter $2M in fees over that time, it’s surprising that CMON hasn’t rolled the dice and created a self-hosted tool to run their campaigns. The laser cutter startup Glowforge set a record, raising $21M with a bespoke crowdfunding tool. With CMON’s built-in fanbase and regular release cadence, it seems like it would be a winning model for them as well.

“Our crowdfunding campaigns may start on Kickstarter but don’t end there, with self-hosted late and retailer pledging,” says Ng. “Of course, we’re looking at all our available options, and review them regularly. For now, Kickstarter still excites our fan base and so we’ll continue supporting each other.”

Crowdfunding success also translates into retail sales. In 2016, CMON raised $5,872,873 through four Kickstarter campaigns, while their total revenue for the year was just shy of $21M, nearly doubling from $12M in 2014.

Founders Find Funding

In 2016, CMON raised $5M in conventional venture capital to expand their business and by the end of the year, held an IPO on the Hong Kong stock exchange valuing the company at a modest, if still impressive $50M. CMON is likely the first company to go from Kickstarter to the public markets. You may wonder why Ng and Doust decided to take their company public so early in its development? “Tabletop games is not a traditional space where there’s a lot of VC competition looking to invest, so having a market floor is very helpful.” Says Ng. “And of course, because people said we couldn’t do it.”

CMON is a hard company for startups to emulate. A $50M market cap isn’t a venture scale outcome. Their product and business model hit a resonant frequency with crowdfunding that may not be applicable to many other product categories. But it’s not hard to believe there are other kinds of startups that could benefit from the non-dilutive funding model that CMON pioneered.

If nothing else, CMON demonstrates that with creativity, capital isn’t that hard to come by. VC is a Hell of a Drug, Kickstarter might just be its antidote.