Crowdfunding Tips: An Intro to Crowdfunding
Crowdfunding is about telling a story. It’s much like creating an elevator speech. You want it to cover yourself, your idea, and the people who will be affected by your idea. You must be entertaining and informative. Online crowd funding also has another requirement – you must do all of this very quickly! This article will give an overview of how crowdfunding works. You can apply these crowdfunding tips to any campaign – no matter how obscure.
What can you offer investors?
Crowdfunding is a popular way to raise money in 2015. Even Elon Musk’s Hyperloop got its investment money through crowdfunding. No matter if you use rewards or equity crowdfunding, supporter engagement is a must. Rewards based crowdfunding means you offer a reward for giving to your product. Equity based crowdfunding means you offer a share of the company in exchange for funding. You’re getting investors.
The battle is won before any shots are fired.
The news is constantly reporting on crowdfunding campaigns that meet their goals in a day. A million dollars raised in ONE DAY! That’s amazing, right?! Examples include the Reading Rainbow reboot project and the potato salad recipe. What the news doesn’t report is the hundreds of hours spent marketing the project before launch day. A launch day is simply when they tell everyone that the campaign is ready to be funded. Then, they get a rush of donations now that the gates are opened. Crowdfunding projects get funded before they launch, not when they go live. Simple as that.
Most successful campaign managers put months of work in before their launch. Six months is a good rule. You should have already teased your growing email list of eager investors. Especially if you’re asking for a lot of money. Make people feel comfortable about giving a sizable investment towards your project. Update them to show you really care. Prove to them your campaign is worth the effort.
Engage an Audience
Often, a product or service is feasible and the investors are ready – if they see social engagement. Not only is it important to interact with your investors, it’s important to get the possible end users excited about the idea of the product. If the money is there and people are excited, there’s a good chance you’ll have a successful campaign.
Also consider getting a notable investor to back your product/service. You want someone who can bring credibility, trust, and authority to your project. It’s the idea that if someone like Mark Cuban enjoys your idea, other people will be more comfortable investing their money behind Cuban’s money.
Do you have an existing audience? Use them! When the Veronica Mars movie held a crowdsourcing campaign, they targeted the television show’s existing audience. If you have an email list for people who have already bought your eBook, reach out to them. They may want to buy your similar product/service. People who are great at building audiences will eventually gain almost a license to print money. People have already shown interest, you just have to keep them coming back.
Choose a Platform
Crowdfunding has been getting more popular each month. As of March, 2015 here are some of the best platforms to consider. Expect the list to grow:
Spy on Similar Campaigns
How much money are they asking for? Who are they appealing to? What do they offer their investors? How successful are the campaigns? Do you notice any similarities among all of the successful campaigns?
You can learn a lot from others.
Making Money off the Product or Service
Crowdfunding is just the beginning. Once you’re successful, the hard part begins. You must deliver. You have pressure to meet the expectations of your audience and investors. Nothing has been truly decided until you can deliver the product/service to the market.