Since Kickstarter brought crowdfunding into the public spotlight in 2009, it has become one of the simplest ways for aspiring businesses to raise the necessary funds to pursue their endeavors. So what is crowdfunding exactly? At its simplest, crowdfunding is a method of raising small amounts of money from a large numbers of people online. The fundraising method had drastically changed the landscape of the startup scene in recent years, now requiring a set of skills that wasn’t needed in the past and making it something to keep an eye on going forward. If you’re considering undergoing a crowdfunding campaign it would benefit you to take these 10 tips under consideration to give yourself the best chance of success.
1. Set a realistic goal
Undertaking a business endeavor isn’t cheap. It costs a lot of money and man hours, but before you begin to ask for money its important to take an objective look at your business plan and compare it to similar business that have taken the crowdfunding route before you. If you’re asking too much, your potential investors might not view your idea as a realistic enterprise.
2. Maximize visibility by using a popular platform
Making your potential investors comfortable goes a long way when you’re trying to raise money. The easiest way to do this is to use a reputable platform such as Kickstarter, GoFundMe, or Indiegogo that has been in the public spotlight for some time.
3. Optimize your pitch
A clear, concise message is important when pitching your vision. If your goals aren’t easily explained or your funding needs not clearly defined it’s likely that you won’t be able to get your project to take off. Take the time to evaluate whether your pitch is the best that it can be so that it resonates with your audience. Make them want to contribute to a great idea.
4. Know your s**t
You’re not going to be able to raise the amount of money that you need without people asking questions. Make sure you’re able to answer any questions that potential backers might have and that you can delineate how their money is going to be spent. Being able to answer investors’ questions quickly and thoroughly shows a maturity and level of professionalism that will make people take you and your vision seriously.
5. Take advantage of your established connections
Some crowdfunding campaigns spawn from a desire to expand an already existing business. If this is the case then your best bet to raise money early on is to reach out to already existing customers. Whether you maintain contact with them via a newsletter or word of mouth, make sure that you let them know what you’re trying to do.
6. Share your success
It’s easy to understand why most people might be hesitant to jump aboard with your idea. It’s a risk that either will or won’t pan out. Showing the numbers is a great way to help build confidence in your potential investors. By this I mean to say that you should show the number of people who have contributed to your crowdfunding campaign as well as how close you are to your funding goal. It’s also a great idea to share updates on the progress of your vision.
7. Social media is your friend
Social media is one of the most powerful tools you can use to drive traffic to your campaign and is one of the biggest changes to the way that people have raised money with crowdfunding. Posting regular status update and engaging with your audience provides exposure and lets people know you’re not just in it for the money. Be a real person, not a corporation. It creates a relatable experience that people will want to engage in.
8. Offer rewards to your investors.
As is the case with any business, providing incentive can do a lot to build an audience and motivate investors. While you may have the occasional person who altruistically invests in your vision, it doesn’t hurt to offer something in exchange for someones support. Most crowdfunding platforms are great at helping you implement a tier system wherein you can assign different levels of rewards based on how much a person invests. If you’re idea is worth people investing in, those people are worth thanking in some way.
9. Any press is good press (mostly)
Assuming you’re not just out to con people out of their money, taking your idea to the press can do nothing but bring good exposure to your campaign. The press is always looking for a fresh story and people have a natural affinity for the underdog. Send out press releases to local publications and TV stations to get your product/idea out there.
10. Give Thanks
At the end of the day, if your campaign sees itself succeeding it’s important to thank the people who helped get you there. Not only is it common courtesy, but it’s also a reflection of the kind of business yours will become, and creating a positive image for yourself can only help to gain more followers and potential customers.