Here are a few Crowdfunding tips to help you get started and to be a success!
“How do I create a successful crowdfunding campaign?”
“Which platform is the best fit for my business or project?”
“What should I offer funders or investors as an incentive?”
1: Pick Your Platform – Crowdfunding Tips
As you’re getting started with your fundraising and crowdfunding goals, the first place to start is to pick the platform you’ll raise funding on.
First, decide if you’re doing a rewards-based crowdfunding campaign or equity crowdfunding (where people become actual shareholders in your company).
If you’re planning to use a rewards-based funding strategy (not investment), Kickstarter and Indiegogo should be on your list, but you should also be aware that there are specialty platforms and communities as well, that focus more exclusively on things like music, healthcare, or non-profits. In short, Kickstarter has a strong track record of success for creative projects, and their fundraising product has been an “all-or-none” fundraising product to date. This means that if you don’t raise 100% of your initial funding goal, you don’t keep what backers have pledged.
Indiegogo has a different product in that regardless of whether you meet your funding goal, if you choose to pay more (up to 9% of funds raised) they will let you keep any of the funds pledged to your campaign. But this has its drawbacks as well, as often times projects need some minimum funding to work, and sometimes the required goal is a good incentive that motivates both crowdfunding campaign owners and those funding the campaign.
If you’re raising investment for your start-up or business, via what is called equity crowdfunding (where people actually can become shareholders for a potential future return), then check out Crowdfunder.co.uk Crowdfunder.com has a simple flat monthly fee of just a few hundred pounds.
2: Pitch and Story – Crowdfunding Tips
It’s important to remember the context of crowdfunding and fundraising online. You’re vying for a person’s attention while they’re online, and they have tons of other distractions and things pulling their attention away from you.
It’s for this reason that your initial pitch and messaging absolutely must grab your funder or investors’ attention right away and pull them in.
The most effective way to engage with the person is via telling a great story – either about yourself, the story of your project or company, or the story of your customer or who your project truly has an impact on.
If you’re creating a rewards crowdfunding pitch, you should know that videos often double success rates for rewards campaigns. You should also be sure to have a clear and compelling “ask” of your funders that relates to your larger story and project.
3: What’s In It for Them? – Crowdfunding Tips
It may sound counterintuitive, but while your goal in crowdfunding is to raise funds for yourself, the more you can focus on what is in it for your backers or investors the more likely you are to create a set of rewards or terms that helps you raise the pounds you’re looking for.
In rewards crowdfunding, make sure you develop truly compelling rewards for your backers that tie in to your story. As a rule of thumb, simply ask yourself, would I go through the trouble to buy this reward myself? Also think about what is truly and unique and compelling you could offer.
One of the best ways to come up with great rewards is to look at some of the big successful multi-hundred thousand or multi-million pound campaigns. Each platform leaves the campaigns up online and you can browse through all their rewards.
In equity crowdfunding, you need to focus on what terms you’re going to offer your investors. While there is not “one size fits all” rule in raising investment, there are some guidelines to follow.
4: Supporter Engagement – Crowdfunding Tip
The most common mistake that first time crowdfunding campaign owners make (in both rewards and equity crowdfunding) is to not adequately engage their first level network of friends, family, and supporters.
For rewards crowdfunding, this means having people set and ready to start funding the launch of the campaign on day one. This is important because campaigns that accelerate more rapidly early on and attain a significant percentage of their funding goal in a short span of time often attract more attention as a whole over the life of the campaign.
For equity crowdfunding, supporter engagement more often means having important and notable stakeholders around the company online around the campaign and represented. This includes the entire team, advisors, board members, partners, and existing investors. Sites like Crowdfunder.com make this easy by displaying this important ‘social proof’ of your existing investors and team right alongside your investment offering online.
5: The Power of Notable Investors – Crowdfunding Tip
You might believe that what you’re doing is the coolest things since sliced bread, but regardless of how great it is, there is one sure way to get other people’s attention who have never heard of you or your cool gadget or project before – and that is to get people or organisations involved with your project or business who people already know and have positive associations with.
If you’re involved in a rewards crowdfunding campaign, ask yourself who can you involve in your rewards in some creative and meaningful way so that people will get excited by and respond to the opportunity to get the reward?
If you’re raising equity crowdfunding, what existing Advisors or Investors, or even partner organisations will bring credibility and trust to you and your business?
At Crowdfunder.com the data shows that equity crowdfunding campaigns that have notable business people as investors or advisors already engaged and listed get up to six times the engagement on their fundraising efforts as those who don’t.
One of the most powerful steps a company can make is to find a first or lead investor to invest before they launch their fundraising efforts online. This has the benefits of both avoiding the optics of £0 invested, as well as often helping to arrive at what are sometimes more “market” terms of what terms an investor would actually invest at.
The first and/or lead investor is a critical part to kicking off a successful equity crowdfunding marketing plan.
6: Planned Marketing & Outreach – Crowdfunding Tips
Crowdfunding platforms are not listing services.
Regardless of the platform, the results you get from the platform are proportional to the effort and attention you put in to the platform and tying this into your own fundraising efforts both on and offline.
In rewards crowdfunding, successful campaign owners put in tens to hundreds of hours on the creative and marketing planning side of their campaign before launching. They then also have a plan for several “pushes” in their marketing to launch, fund, and push to close funding at or above their goal.
7: The Data Perspective – Crowdfunding Tips
The overall crowdfunding industry is growing exponentially.
Obviously, this means that there are lots of opportunities for those seeking funding and for those who are donating, pre-purchasing, or investing pounds.
But what does the data say for you as someone looking to run a crowdfunding campaign?
Do you have the kind of existing network, reach, press contacts, and marketing plan to really meet your goals?
Adding in additional higher pound amount rewards can help; most campaigns and also include several higher priced rewards between £100 up to a few thousand pounds. It is critical to ‘run the numbers’ up front for your campaign by considering the rewards you provide and how many backers you will need to get at each reward level to make your overall goal.
Many of our customers have started their business or organisation with the use of Crowdfunder, or have been established businesses and then created a crowdfunder to boost their business, expand their company or take a different direction with a community angle. Whatever the reason Crowdfunding works! And with the extra little incentive of a reward for a pledge you’ll be off to a flying start. We hope you’ve found these Crowdfunding tips to be useful!
One of our clients recently over acheived their fundraising goal within the Voom Crowdfunder scheme! See Here: Cornish Food Box
Choose any bag from our vast range and simply promote them on your crowdfunding rewards page.
Contributor: Chance Burnett.