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  • Crowdfunding Basics: Everything You Need to Know to Crowdfund Your Next Project

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    In digital era, crowdfunding has emerged as a great medium for startups and early stage companies to raise funds by reaching out to masses. Crowdfunding means receiving donations from people who you believe will like, support the idea of your business. However, reaching your crowdfunding goal is not as easy as it may sound, there is in fact a lot of thinking, planning and activity involved in making a crowdfunding campaign successful.

     

    This article provides insight into all that takes to bring a desired outcome from a crowdfunding campaign.

    Right Platform

     

    Picking up a right platform among over 600 crowdfunding platforms world over is the matter of paramount importance to ensure the success of your crowdfunding campaign.

    Rewards-based crowdfunding and equity crowdfunding are the most popular categories of crowdfunding. Indiegogo and Kickstarter are used as the most common platforms for the former, whereas Crowdfunder or Circle Up should be on your list if you are going for the latter.

    Rewards-based crowdfunding offers special rewards to supporters to acknowledge their contribution. Besides, it could also offer donors an opportunity to help in designing the product.  Be creative while choosing rewards, they need not to be expensive, but should be be the best fits to your business and service.

    Now moving to equity crowdfunding, it offers donors a chance to become actual shareholders of the company, thanks to Jumpstart Our Business Startups Act of 2012 . The amount many equity crowdfunding platforms charge is way less than what investment bankers charge to raise funds.

     

     

    Engaging Story to Tell Your Target Group

    A great story to tell about you or your project increases your chances to achieve your crowdfunding goal by many folds. You need to pitch your story in such a manner that it engages people and encourages them to donate as much as they can afford. The story should also talk about positive impacts  or benefits your business and product will bring to people.

    An initial pitch plays a big role in attracting attention of people. Once people take notice of your campaign, it becomes easier to coax them into donating money to accomplish your mission.  Adding videos to a story makes it sound even more realistic and appealing. One should look into most funded crowdfunding campaigns to get a good idea about an initial pitch, story etc.

     

    Ask Friends, Family and Supporters to be Early Adopters

    Whether or not your crowdfunding campaign will reach it goal has a heavy reliance on the funding raised on initial days of launch. Tell your friends, family members, supporters and whoever you know about your campaign, and request them to do their bit to make your campaign a success. For this, you see the basic psychology of human beings are to follow others, so if your campaign does well on day one, more people are likely to join the clan and take you closer to the finishing line.

     

    Keep sending Reminders to People about your Campaign 

    Reminding somebody of a thing might not be your way of living life, but you need to break the habit as people often tend to forget that they were looking forward to donate for a cause. So, send them reminders, and they will donate for sure if they really believe in your product or service.

     

    Identify what Entices People about your Campaign

    You need to put a lot of thought behind what your campaign offers to backers or investors. Make a list of rewards that make you feel worth donating for. This will certainly help you have a clarity over the kinds of rewards you should offer to people who back your campaign. For equity campaigns, its important to focus on terms that would win hearts of investors.

    You should try offering nice, alluring package of rewards for different amounts, like $10, $20, $50. For even higher amounts, like $1000 or $2000, you need to offer unique packages of rewards, but it doesnt mean that rewards for lower donations are worthless. For $20 donation, you can offer a company T-shirt with the contributors name on the back. Recognition is a big factor that motivates a donor, so offer an opportunity to them to flaunt via rewards.

     

    Marketing and Planning

    Never make the mistake of trivializing the importance of marketing no matter how good your fundraising platform is. You must spend a lot of time on marketing and research before your campaign is finally launched.  Social media sites should be the first on your list to market your product because campaigns that had gone viral on social media not only reached their goal well before time, but surpassed the target as well.

    Try to have a strong group of followers on Twitter who are contributing and sharing your project. A Facebook page also offers significant help to promote your campaign as backers can ask their friends to like the page and help accumulate funds for the campaign. Millions of people are active on social media, all you need is a right strategy for marketing to make your crowdfunding campaign a big hit.

     

    Be Transparent and build Trust

    People donate money for something only when they have full trust on it. Clearly mention in your campaigning script what all you will do with the donors money. Another way of maintaining trust among donors is to be present and open during the campaign. Vow to people that you will make regular updates about progress of the project even after the campaign ends so that they can be rest assured that you will work hard to bring the product into the market in near future.

    We hope this article helps you understand all you need to design a crowdfunding campaign in order to take your business to new heights. 

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