Crowdfunding (also called crowdfunding, crowdfunding, and hyper funding) is often an excellent alternative to funding from investors for many entrepreneurs and small businesses. Crowdfunding allows hundreds or thousands of backers to spend money on a single purpose, like helping launch a new product. In return, supporters receive rewards, such as early product delivery, T-shirts, or backstage access to the development.
Starting a crowdfunding campaign is relatively easy, but you need additional effort to succeed. We have outlined ten steps for increasing the chances you will receive funding. Kickstarter and IndieGoGo are the most popular, but dozens of others are out there.
1. Choose the Right Platform
Some sites only accept projects from specific locations, others only permit certain projects, and others accept only nonprofits. There are also differences in fees and payments. For example, some sites require that you reach your goals to receive compensation, whereas others allow you to pick up regardless of how much money is collected.
2. Write a Compelling Description
You must weigh your options to decide which is best for your project. Of course, you want to keep this brief and concise. A good rule of thumb is to keep the summary to just three or four major features and to share multiple details on your offering's benefits using bullet points.
Your summary should provide readers with a solid understanding of your project, why it is so awesome, and why they should contribute to completing it.
3. Create an Awesome Video
Video is a crucial component of your pitch. It allows you to connect emotionally with your supporters in just two minutes. Let them see the real person behind the project, telling them about your team, what motivates you in your job, and why your project is unique. If you have a working prototype, showcase that here, as this allows potential donors to see how their lives could improve if they had what you are offering. However, be careful to focus on the technical details, or you may lose the interest of some of your less tech-savvy supporters.
4. Pictures Say a Thousand Words
A picture says a thousand words. Include images to give potential patrons a better sense of you're offering. Of course, it is best to have actual photos of the prototype or demo. Still, sketches or other design materials are also helpful (if you are crowdfunding for the app idea, you should include mockups or screenshots to get the best results).
5. Determine What Your Funding Goals Should Be.
This should be based on what you are going to do with the funds that are raised. It will also help to let your viewers know what the funds will go towards since that helps them feel they are contributing towards a particular goal, increasing their engagement with the project. You want to set a reasonable goal that gives you a fair shot at reaching it, but does not sell yourself short.
6. Offer Multiple Funding Amounts
Make it so someone can pledge whatever amount of money they would like. For example, let people contribute $1 for a smaller reward, or $50,000 for an incredible, all-around perk, and anything in between. Do not stop people from supporting you, even if it is nominally in size. You aim to incentivize people to give you money for your project.
7. Offer Attractive Perks
Your incentive model must match the amount of money raised at different levels. For example, if a person backs you with $500, they should receive significantly better rewards than a person pledging $10. Make sure, though, each reward is appealing enough to be worth the amount you are asking for.
8. Plan Well
Only promise your backers you will deliver their rewards on a specific date if you are sure you will keep your promise. Many successful crowdfunding campaigns ended up upsetting their backers because they promised something that, in the end, they couldn't deliver on a promised deadline. However, unexpected setbacks happen, so budget for additional time early on.
9. Use Your Social Network
You must create a community around your project before starting a crowdfunding campaign. Create a bit of hype around what you are doing, and get supporters on board before you need their help. Once you have launched your campaign, let your fans know they can help your project become a reality by contributing to your fundraising goals or sharing the campaign with their friends and family. Put your marketing and promotion skills to the test.
10. Put Your Marketing and Promo Skills to the Test
Most crowdfunding platforms run tens of thousands of campaigns at any given time. So do not expect these to be your sole source of outreach; you will have to bring the necessary attention to your campaign for it to be successful.
Instead, use all available resources to spread awareness and meet your funding goals. This is by no means an exhaustive list, but if you follow the tips listed above, you have a far better shot at reaching your crowdfunding goals.