Crowdfunding is changing the way ideas can be funded. There are many routes to crowdfunding but one of the most popular is using a reward site that gives a series of “rewards” in return for pledges. The more you pledge, the bigger the reward.
One of the most successful campaigns of this kind is Pebble Smart Watch™ which raised over $10m on the funding platform Kickstarter by offering anyone that pledged more than $99 a chance to receive one of the first Pebble Smart watches as they rolled off the production line. However, it’s estimated that around 60% of crowdfunders do not meet their monetary goal.
It’s not as easy as it looks to secure crowdfunding but if you do your homework and take the right approach, the chances for success for your bright idea are high.
Here are my top five tips to help you launch your own successful crowdfunding campaign:
- Create an emotionally-charged video
The video pitch is your shop window and if it doesn’t trigger the right feelings in your potential investors then you’ll severely hamper your chances of getting your campaign funded. Ultimately you need their emotional buy-in before the money flows in. They need to feel that they know YOU as a person and your STORY. Use the classic movie formula: The likable hero (you) encounters a problem and struggles with it, but using great skill and persistence finds a world-changing (or at least an interesting) solution. Remember to close your video with a call to action. WHY should they donate money to your campaign?
- Dip your toe in the water
Test the water by sending a message to your supporters, customers, and friends. It could be a casual email just asking what they would be prepared to donate in return for a series of rewards, and how much. The founders of Escape the City needed a hefty £500k investment and, using this approach, they received proposed pledges of more than £5m. They knew then that the amount they were aiming to raise was realistic – and when they launched their campaign they were fully funded within just eight days. Once you have tested the appetite for your campaign, and can see the potential response, you’ll be able to make a judgement on the amount you can realistically raise.
- Get your marketing plan sorted before you launch
The key to any crowdfunding campaign is building momentum. You’ll have a massive advantage if you can plan a series of blog posts, press releases, website updates and live events during the campaign so there’s no let-up in activity. The biggest reason why Kickstarter campaigns fail is because the entrepreneur thinks their job is done when the video is uploaded and their campaign is live. Flash forward two weeks, when they realise that nothing is happening and they need to actively market their pitch, and by then it’s often too late – momentum has been lost.
- Don’t be shy
I was chatting to an entrepreneur recently who failed to raise the funds they needed on their Kickstarter campaign. It didn’t take long to realise why they weren’t successful. They felt that they didn’t want to bother their personal contacts with what they were doing, and so they missed out on a critical boost within the first few days of launching their campaign and never gained the support from others that didn’t know them. The way the crowd sees it, if the entrepreneur can’t get buy-in from their own friends, family and fans, why should they get involved?
- Get the bloggers on board
After you’ve got your family, friends and fans active in supporting you, get some support from key bloggers who have huge circles of influence. I’ve seen a whole campaign turn round after just one short post by a popular blogger. Do your research in advance and draw up a wishlist of 50 bloggers that could write about your campaign with a link to your pitch. Contact them early, be human, be friendly and polite, tell them your story and ask if they would mind supporting you.
Paul Grant is an experienced entrepreneur, business coach and speaker who is also the founder of The Funding Game, which runs a monthly workshop at the British Library called “How to Find the Right Investors”
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