There is a lot of potential in crowdfunding – if done properly a crowdfunding campaign can let you raise money for preparing a luxury meal to funding a new business organization. However, to achieve this you will first have to learn the basics of crowdfunding to be able to improve your methods and raise more money for greater causes.
Crowdfunding is still a fresh concept for raising money, but its growing fast. It was estimated at over 30 billion dollars worth of market and it has been proven as a legit and effective way for raising money, as even some of the biggest industry leaders are using crowdfunding as a method for raising money.
So, if you are planning on using this brand new model for raising money for your business incentives, but have doubts about where you should start your campaign, here are some of the most important things you should know to get the most out of your each crowdfunding campaign. Still, don’t be fooled by some flashy crowdfunding figures you’ve heard, and think that crowdfunding is simple. It is possible to raise a lot of money, but only if you know what you are doing and what ideas you are raising for.
It will take a lot of planning, hard work and learning to create a crowdfunding campaign, and there is a lot you must know before you start one. So, let’s get to the point.
Like I’ve said earlier crowdfunding is not as simple as just posting your campaign and when you wake up the next day you have received $30,000 worth of pledges. There is a lot of work involved in preparing the actual campaign before you can feel free to launch it. The first thing you must do is create a strategy that outlines how you will reach your target audience.
A very effective approach is to build your networks before you launch your campaign, establish relevant connections, build up followers, visit important events, and spread the word of your campaign before it even becomes active. When you set up the climate for your campaign in advance you will ensure that your campaign gets off to a strong start, rather than scrambling for backers randomly and without a foundation for your incentives.
Create social media profiles on all networks that your target audience visits, build a website with a blog, and you can even create an email strategy to notify people of your campaign. This is how you will build awareness about your campaign. Let people know that something special is coming and answer questions to make them back your ideas. What’s even more important is that followers and backers build exponentially – the more people support you, the more will follow their lead and become open to your ideas.
Learn About “Your” Crowd
You should never allow yourself to overlook the importance of “the crowd” for your campaign. Basically, one crowd can be divided into three layers:
- The first and most approachable layer of your crowd includes all of your friends, acquaintances, close family and distant relatives.
- The second layer of a crowd includes all friends and relatives of the people in the first layer.
- The third one includes the general public and all the people that might have interests that make them close to your ideas.
Crowdfunding is not called that for no reason. The crowd is one of the most important aspects for succeeding in crowdfunding. There is no way you can ever raise money if you cannot convince people to support you. Since the beginning of your new idea you will have to take your target audience into account.
You must bring your ideas closer to people by finding out what their needs, passions, interests and pain spots are. Give them a solution to their problems, and if you realize that there is a big enough crowd that has the same problem, you can go through with your idea.
Your whole campaign must be adjusted to your crowd, the way your present your ideas to them is highly important and if you manage to convey your message properly and promote to them, they will back you and donate money.
Telling Your Story to the Crowd
Probably one of the most argued and discussed topic when it comes to crowdfunding revolves around techniques and methods of telling your story to the public. Everyone agrees that it’s a vital part and that it combines all the other integral parts into one. The page of your campaign must be compelling, boosted with a video and professional photos.
However, your story and the story of how you came up with the idea are the backbone of any crowdfunding project. The nature of the people who like supporting crowdfunding projects is such that they all like to hear a good story that can sometimes spark their imagination and connect them to something relevant in their lives. For example, one of the most successful crowdfunding campaigns comes from Buchan, a small Australian town with only around 400 residents. The town might be small, but the campaign was able to raise around $600,000 for rebuilding a local restaurant-pub.
The pub was the only one in that town, and even though most of the people who supported the project were not from Buchan, they loved the amazing story and the troubles of the community in that town motivated them to help rebuild the object. They related to the story because people imagined how it would look like if they didn’t have any pubs or restaurants in their city.
How to Write Your Story
Explain to people what they will get out of your campaign if they support it. Take your time and explain what benefits they will have if you achieve your goals, how their lives will be easier and better. The bottom line is that everyone wants to know what benefit’s he or she will have. Define the purpose of your idea by explaining how people’s money is going to be used and why you want to make your idea a reality.
Be an authority and tell your crowd why you of all people are the one who deserves a chance to realize a unique idea. Share all of your credentials and past experiences. Furthermore, make sure to point out the important characteristics of your project that make it better than any other related project they might come across. You can do a further research and see some of the best crowdsourced software rankings and find out what makes them special and appealing to people who supported them.
Make sure to update your story frequently and showcase the current number of your supporters, like I’ve mentioned earlier – people have a sense of safety when they know the numbers. When they find out that there is a large enough crowd that already donated money your project and ideas will seem more worthwhile and appealing.
Another important thing to remember when writing for your crowdfunding project is to be grateful to your supporters. You can even use your social media profiles to call out and link to supporters.
Choose an Appropriate Platform
Not all crowdfunding platforms are the same. You might be interested in submitting your campaign to some of the largest crowdfunding platforms, but they might not work as well for you due to the nature of your idea. Furthermore the type of support platforms offer are different and the right platform will indirectly help you attract supporters that are closest to your ideas and have interest in what you offer.
For example StartSomeGood is a platform best suited for non-profit change-makers and social entrepreneurs, while Crowdrise focuses on gathering money for charity. You get the picture, it doesn’t matter that a certain platform has much more visitors if the people visiting it have no interest in supporting your ideas whatsoever.
Another important aspect is to consider the model of crowdfunding platforms have. There are two most popular types to choose from: investment funding and donation funding. Investment funding is used to sell business ownership stakes that are in the form of equity or debt. Donation-based funding is based on an exchange. The supporters who have made donations to a certain campaign will get rewarded at the end. The rewards can be products they donated for tickets, t-shirts etc.
In the end, make sure that you calculate accurately how much money you need and be realistic of how much money you can gather. Most platforms are very strict with their rules and policies and in case you don’t reach your number, all of the money you raised will be taken away from you. Even worse, if you set the number too high your campaign might be rejected and never posted.