How To Start a Successful Crowdfunding Campaign
22 June 2018
Crowdfunding can be the most fun and exciting method of funding when done right. Whichever platform you choose to use to launch your crowdfunding campaign on, ensuring a successful campaign requires thoughtful preparation and strong execution.
Preparing the Campaign
When it comes to preparing your campaign, there are a few steps to follow before you get started.
1. Be Specific
Make sure that it is clear to potential supporters exactly what it is they are investing in. Where is the company now and what will be the ultimate outcome of the campaign? Make sure it is also time-limited.
2. Consider your Financials
You must ensure that your campaign is fully costed and you have a tight grip on your finances. When it comes to setting a funding target, make sure it is realistic and not excessive – the project should be your passion, not just a money-making exercise.
3. Prepare a Pitch
Crowdfunding pitching is usually different to other routes of funding, such as pitching to Venture Capitalists and Investors. For this route, often the best idea is to create a short video explaining what your project is and what you want to achieve. This video is an opportunity for you to show your passion and knowledge while building up a level of trust with potential participants.
4. Understand your Contribution Strategy
There are a few different strategies you may have to decide between when it comes to deciding how you want contributions to your project.
Donation and Rewards – What are your contributors receiving for backing? For some projects, it is appropriate to simply offer recognition in the final project or a reward that could be in the form of the final product upon completion. This is a strategy sometimes used in film or video game production.
All or Nothing Campaigns – This refers to the practice of foregoing any pledged funding unless the whole target is reached. Research shows that these campaigns are more successful than ‘Keep it All’ ones are. Another benefit of this is that it forces you to be realistic and careful when deciding how much funding you really need.
5. Begin your Campaign
A crowdfunding project always begins with an online campaign. Get the message out there about who you are, what you want to achieve and build up an audience. Once you begin your project, you have a receptive audience ready to participate. If you can pinpoint your most devoted supporters and get them to donate first, this will help build momentum and encourage others to join in.
Things to remember
When it comes to failed projects, the average amount raised is 10.3%, and 97% of those failed never make it past 50%. It is therefore vital that you get out of this 10%-50% ‘Danger Zone’ as quick as possible. These tips will help ensure you reach the magic 50% mark.
Keep your backers updated
You need to keep your investors interested. By keeping them in the loop and keeping up your presence, you will help secure even more investment. If you do not keep them updated, they may also think you are not going to be able to deliver on your promises.
Ensure you can work with your manufacturer
It may sound obvious to ensure you have a manufacturer to work with, however, it is so important to your campaign. Many manufacturers will want your custom and may tell you that they can help. However, it is up to you to make sure they can really deliver. Work out a production schedule that works in time for delays, as your investors are going to want to know when they can expect to receive the product that you got them so excited about.
Take Feedback on Board
Customer feedback is a hugely useful resource when it comes to running a crowdfunding campaign. Get members of the public to test out your product and understand what they like and dislike about it. After all, these are the type of people you need to impress to secure investment in the first place. If there are any problems with the product, this gives you enough time to make any necessary improvements.
Make Everything a Story
While you may be able to get a significant level of coverage for launch and perhaps exceeding some of your early goals, this will get harder the longer your campaign lasts. If you have a real story behind each goal you achieve, then this creates more exposure, setting you apart from every other company.
Reward your Early Backers
Early backers are the most important backers. You need them to encourage others to get involved, so show your appreciation on social media and keep the momentum going. Methods like this show people they are investing in an idea, not just a product.