Thanks to the innovation of crowdfunding, the doors of financial opportunity have swung open, allowing people at every income level to get in on the action. The crowdfunding market in 2011 garnered $1.2 billion, which sounds pretty impressive, until you consider that crowdfunding in 2014 is predicted to total almost $10 billion.
That got your attention, didn’t it? You know those backers are out there; you’ve checked out the crowdfunding sites, maybe you’ve even backed a campaign. But now you’ve got a project of your own that you know can be a success. How can you attract all those unknown donors who are searching for the right project for their dollars? Do you want to run a rewards-based crowdfunding campaign? What about equity crowdfunding? Before you design the strategy that’s going to make your project a great success, check out these crowdfunding tips so that you’ll know the right way to promote your crowdfunding campaign.
Before your campaign gets off the ground, you need to choose the ground it’ll stand on. If you’re planning to run a rewards-based campaign, you might be thinking that Kickstarter and Indiegogo are your new best friends. But if you run a Kickstarter campaign, you’re trusting your product to “all-or-nothing” fundraising, and if you aren’t able to raise the full 100% of your initial goal, you can’t keep any of the funds that were raised. Indiegogo, on the other hand, will allow you to keep the funds that have been pledged to your campaign if you decide to pay up to nine percent of the funds raised.
But you don’t have to limit yourself to Kickstarer and Indiegogo. There are specialty crowdfunding platforms for non-profits, music, and even health care, that might be just right for your campaign. Equity crowdfunding creates shareholders who support a campaign on the strength of the product’s potential to deliver a return on the investment. The site Crowdfunder.com charges a monthly fee; the site Circle Up will claim a percentage of the funding dollars that you raise.
Now that you’ve decided upon the platform that’s right for your campaign, you need to see your product as a potential backer would see it. What’s your opening pitch? How can you grab attention and hold onto it? The power of the story that you tell will engage the backers both rationally and emotionally so that they are eager to give you their support. Don’t forget that for rewards-based campaigns, seeing is believing: videos have the potential to double your success rate.
Remember that there aren’t any crowdfunding elves that are going to do all the work while you sleep. In order to conduct a winning rewards-based campaign, you’ll need to invest thousands of hours in preliminary planning before the campaign is launched. Think of the early stages of crowdfunding as a family affair. Get your parents, siblings, cousins, friends, and godparents in on the campaign. Quick action once the campaign gets underway gives your project the traction it needs to show success to outside backers, especially if dollars show up fast before the deadline.
There’s a time and a place for self-interest and you want to satisfy that “what’s in it for me?” motivation. What rewards can you offer that are irresistible for your backers? Investigate other campaigns to see what worked for them. Don’t limit yourself: think big and check out the multi$$$$$ campaigns for inspiration. Steal ideas from the best!
In fact, regardless of which kind of campaign you’ve decided to run, what kind of backers can you attract? Crowdfunder.com data indicates that an equity crowdfunding campaign with investors or advisers who are regarded as notable will entice as much as six times the level of engagement as a campaign that lacks this kind of support. By hooking a lead investor before the online fundraising begins, your campaign avoids the stigma of $0 invested
According to Kickstarter, the average contribution is $25. What if you want to raise $25,000? How are you going to attract the sufficient amount of traffic to fund your campaign? One way is to offer rewards for different levels of donations, from $100 to $1000 or more. Equity crowdfunding’s average investment is approximately $25,000, allowing the campaign owner to receive less money from more investors.
By following these steps, you can own a crowdfunding campaign that is thorough, effective, and above all, successful.