On Tuesday night, Alan Crabbe stood in front of a room full of investors, at the 150 year-old Union, Universities and Schools Club in Sydney. He was pitching to Sydney Angels, Australia’s largest collective of early-stage investors. The period decor, vintage red carpet and a sea of suits made for a nerve-wracking pitch experience. Crabbe was seeking $500,000 to help grow Pozible, the Australian crowdfunding platform, which he developed with co-founder Rick Chen.

The pair explained in 10 minutes how Pozible works, and how they’ll achieve their vision to redefine the way creatives raise money in Australia. This was followed by another 10 minutes of questioning by potential investors — on growth plans, financials, and staff recruitment.

The pitching experience is almost the antithesis to the one Crabbe and Chen have created for users of Pozible. Success on a crowdfunding platform requires you to build a strong campaign, leverage social media, and make people feel part of what you’re doing. You need to build excitement and buzz. It’s not necessarily about how you respond to curly questions, or whether you’re a naturally great presenter. You’re communicating directly with the market of your potential product. A successful campaign can be validation in itself.

There are lots more crowdfunding sites now. Last week we profiled LIFX, which raised more than $1.3 million on Kickstarter for its iPhone-controlled bulb. It can be difficult using these well-known platforms as an Australian startup — there are tight rules that require your company to be incorporated in the US, and have a local bank account, phone number and mailing address.

This is one of the reasons Crabbe and Chen decided in early 2010 to develop the first local crowdfunding platform. They launched in May of that year. Since then, Pozible has raised more than $5.8 million for local creative projects: short films, food trucks, and even an independent news website. Crabbe and Chen have also locked in a number of partnerships with organisations including the Melbourne Fringe Festival, ScreenWest, and artsHUB; which use the platform as an alternate funding tool.

Crabbe says people are becoming more comfortable with using the platform; potential supporters are also more familiar with how crowdfunding works. In 2010, 47% of Pozible’s projects were successfully supported; the figure is now 54%, and continues to increase. The amount being raised on the platform has also increased — from $50,000 in the first month, to more than $770,000 last month.

The founders see the platform eventually replacing government grant funding programs. Crabbe spruiks the benefits of a public campaign: “with grant applications, you’re making your projects fit the criteria. You’re also demanding whatever amount of money they’re willing to give,” he says. With Pozible, your success depends on your ability to rally a group of supporters, market yourself and build a strong reputation. It’s totally different to pitching to a room full of investors, or working with a government body.

The pair are focussed on growing Pozible’s partnerships with other organisations. ScreenWest, WA’s screen funding and development agency, currently provide a 3 to 1 matching grant through Pozible for WA filmmakers — raise $10,000 on the site, and you’ll receive $30,000 in government funding. Crabbe tells me he hopes to get more corporates using the site. Companies like Volkswagen are already funding creative projects, and can use the platform as part of their branding. Expect an announcement towards the end of November, as Pozible has one large corporate already committed.

“The key thing for us is to look at businesses and sponsors, and help them use Pozible as another marketing channel,” says Crabbe.

As a tech founder, Crabbe finds it hard not to spend his time deep in code. He’s learnt that having the best tech product isn’t necessarily going to mean business success. Together with Chen, he devised the 20% rule: no more than 20% of their time should be spent on tech. The pair will actually delay new product releases until they’re absolutely necessary, until people are asking for it.  The focus is on customer development and building the business.

“We hold back as long as we can. You need to get your first customer before you release a feature.”

Some people will tell you to become a ‘thought-leader’ in your industry. Yes, it’s one of these cliches, but becoming the go-to spokesperson on a particular issue can boost your profile, and get your business in front of people. Crabbe will often speak at arts events, university lectures and public forums on how to raise money for artists.  Just last week he was in Newcastle at the Look Hear Art + Design Festival. Meanwhile, Chen was running a workshop on crowdfunding for music in Melbourne.

“I do quite a few keynotes on how Pozible has been most successful. We get invitations to speak to potential members, so we say yes.”

Because the success of the site depends on the success of the campaigns people list, the best form of promotion is to assist people to run the most effective fundraising effort. People want to learn how to replicate success. Try googling ‘how to run a successful Kickstarter campaign’ — you won’t believe how much information there is. There are even tailored courses available now: Sydney digital studio, Protein One, is charging nearly $500 for a one-day course to learn how to run a successful campaign, based on its success fundraising for an interactive storybook app about bullying.

After finishing university, Chen moved to Melbourne, leaving Crabbe in Sydney. Pozible now has an office in each city. Their Skype accounts get a good workout. There’s many advantages to operating in multiple locations: access to different networks and partnerships, and the ability to have a physical presence at events in both capitals. Crabbe says the pair realised they needed someone in Melbourne: “it still seems to be the creative capital of Australia.” The other benefit, explains Crabbe, is that the co-founders can focus on their own areas without distractions; less discussion about unimportant decisions.

And the fundraising experience? Crabbe says he has received early commitment from a few angel investors — he’s been targeting individuals over the last few weeks. One thing is for sure though, he laughs as he tells me; “pitching is really awful.”