Crowdfunding is increasingly becoming one of the best startup funding options for almost all types of startups. It’s a collective cooperation of people who pool their money and resources together to support efforts initiated by others. This networking and cooperation, where it helps startups to grow faster, also allows the startup investors to put their money in something that they truly believe in.
The popularity of crowdfunding can be understood with the fact that new crowdfunding platforms launch literally every day! But, you may also know the fact that the overwhelmingly, crowdfunding campaigns do not meet their fundraising goals! Almost 89% of the projects fail to reach their crowdfunding targets.
The reason that why only 11% of crowdfunding campaigns are successful is nothing other than improper planning. Besides that, most of the first time crowdfunding campaigners do not know how to develop the campaign materials, how to engage the audience and where to promote the campaign!
So, if you are really keen to take your startup the next level with crowdfunding, you must have a strategic plan with powerful execution. This article will guide you on how to plan, launch and run a successful crowdfunding campaign for your business.
Phase 1: Planning Your Crowdfunding Campaign
Planning is most important, so give it the required time, i.e. make sure that you spend time in market research, goals setting, platform identification, campaign materials and promotion strategies. Follow these guidelines to make sure that you devise a foolproof crowdfunding plan:
- Start working on your crowdfunding campaign at least six months before you want to launch your project.
- Have a clear idea about your funding needs and potential investor profile.
- Explore all the available crowdfunding platforms and filter out 3 to 5 best ones. Do check these 77 best crowdfunding websites for startups. Do not forget to check out the niche/industry specific crowdfunding pltforms like OFF3R, PRIKK, and Ratafire etc.
- If you’re raising rewards-based funding (not investment), Kickstarter and Indiegogo must be on the list, but you must also focus on specialty platforms and communities which are built exclusively for your niche, i.e. music, healthcare, or non-profits.
- Know what type of campaigns are successful on popular platforms, i.e. Kickstarter is for creative projects only.
- If your product is not something innovative, you may look for equity crowdfunding (where people actually can become shareholders for a potential future return). In that case, you must check out Crowdfunder or Circle Up.
- Read the fine print about the platform you choose and set your funding goals accordingly. This is important, because there’s some minimum amount that platform will keep!
Phase 2: Developing a Foolproof Crowdfunding Campaign
Once, you are all set with identifying the platforms, you must work on pitch and story. Remember the context of crowdfunding and fundraising online, i.e. you’re trying to get people’s attention while they’re online, and they have tons of other distractions and things pulling their attention away from you.
So, your pitch and story must absolutely grab your funder or investor’s attention right away and pull them in. If you cannot do it yourself, get it done by a professional! Here are some tips to make sure that your crowdfunding campaign has an awesome story and pitch:
- If you have a rewards crowdfunding pitch, you must know that videos often double success rates for rewards campaigns.
- A clear and compelling “ask” of your funders that relate to your larger story and project makes it more clear for funders to take action.
- While your goal in crowdfunding is to raise funding for yourself, but your campaign must also focus on what is in it for your backers or investors. Highlight the benefit clearly and in a very compelling way.
- Look into some of the big successful multi-hundred thousand or multi-million dollar crowdfunding campaigns to check how they have highlighted the reward!
- In a case of equity crowdfunding, focus on the terms you’re going to offer your investors.
- Moreover, have all the marketing material ready, i.e. handouts for seminars, email blasts, social media material, videos, presentations etc.
Phase 3: Launching a Successful Crowdfunding Campaign
With a highly attractive and attention seeking pitch developed by a crowdfunding expert, you launch your campaign, but it won’t guarantee success unless you maintain the engagement. Here are some tips to maintain engagement in your crowdfunding campaign, so it can reach more people and your startup meet the fundraising goal!
- You may be amazed to know that most of the first time crowdfunding campaigns fail because they do not adequately engage their first level network of friends, family, and supporters.
- Have at least 25 to 50 people set and ready to start funding on the launch of the campaign on day one. This is important because campaigns catching an early acceleration achieve most of their funding goal in a short time.
- If you are launching an equity crowdfunding campaign, make sure that all important and notable stakeholders are represented, i.e. the entire team, advisors, board members, partners, and existing investors. This helps mainly is gaining supporter engagement!
- Get a notable persons/celebrity/influencer to support your cause, if you can. This is going to get your campaign multiplied exposure and will surely help your reach the goal faster.
- Have existing Advisors or Investors, partner organizations onboard, it will surely bring credibility and trust!
- One of the most powerful ways for startups to have their crowdfunding campaign stand out is to find a first or lead investor to invest before they launch their fundraising efforts online. This is how you can avoid $0 invested!
Phase 4: Increasing the Outreach of Your Crowdfunding Campaign
Regardless of the platform, you need parallel efforts to make your crowdfunding campaign a success. When you are running a crowdfunding campaign, you must have to get maximum people know about it and you cannot just ignore the Social Media.
- Choosing social channels for the campaign is very crucial. Focus on the social channels that will provide the most impact for your campaign. Consider the channels where you have most followers, channels where people will be more interested in sharing your campaign and of course the platforms where you can attract influencers!
- Once selected, make sure to find the right time for sharing your campaign, i.e. when most of the prospects are online.
- Explicitly use the #hashtags to make sure your message is easy to find!
- Use the platform ads, i.e. Facebook/Linkedin/Twitter ads/Linkedin advertising.
- Urge them to take action now by creating a sense of urgency.
- Promote your content is various dimensions, i.e. do not just stick to sale type posts!
- Send out email blasts. Know how to develop a successful email marketing strategy.
- Sponsor a newsletter of influencer web portal.
- Pitch your campaign to journalists.
- Reach out bloggers with some incentive to get coverage and exposure!
Making a crowdfunding campaign a success requires hard work with smart and strategic moves and I hope the above tips will help you make most out of your crowdfunding campaign.