Want to start a business but need financial capital to turn that dream into a reality? There are lots of ways to fund your business but most, if not all, have tons of requirements before they even begin looking at your proposal.
Banks will need collateral to prove your capacity to pay, government grants require lots of documents, and “love money” or loaned capital from friends and family will only provide a limited amount of financial assistance.
Although raising funds is extremely hard, there’s a new type of financial backing that is gaining popularity due to its flexible terms and versatile requirements – crowdfunding. Read on to learn more about the secrets of having a successful crowdfunding campaign.
Share your story
Nobody will fund your business if they don’t know a thing about it. Investors, especially, need to know everything including your background as the owner, your plans, ideas, processes, working budget, and why you’re interested in it. You need to share your story, and let them feel your passion and dedication to demonstrate the legitimacy, as well as the credibility of your project.
Communication is key. You need to convey your message loud and clear. Whenever you interact with potential backers, make sure to establish strong visual imagery of your business. Your story should be compelling and remarkable enough to capture their attention. Demonstrate your skills by speaking clearly and connect emotionally through a relatable story. Likewise, you should be able to distinguish your business from the rest and explain what makes your products or services unique.
- Create a stimulating and distinctive project header image.
- Your video pitch should be crystal clear, detailed, and straight to the point.
- Show that your business solves a specific consumer problem.
Choose a platform that works for you
The next tip for a successful crowdfunding campaign is to choose your platform wisely. There are various crowdfunding platforms available to the public but two of the most popular are Kickstarter and Indiegogo. Kickstarter is a favorite but it features an all-or-nothing funding model. If you don’t meet or exceed your financial goal, you’ll get nothing. With Indiegogo, you can keep the raised money regardless of your goal status.
Along with choosing the best platform, it’s important to set your funding goal right from the start. Think about how much money you are going to need to kick start the business. Remember that you are not allowed to change or modify the funding goal once you have finalized the campaign. When estimating your funding goal, keep these in mind:
- Most of your pledges will come from the people who know you.
- Although difficult, attracting new backers is highly possible.
- Be realistic, not everyone will pledge for your project.
For your crowdfunding project to be successful, you need to offer rewards to your supporters. Investors may only offer financial support if they will get something in return. One thing about giving rewards is that you need to be fair in terms of benefits and pricing. Likewise, make sure that you can fulfill and deliver the rewards in a timely manner. Keep in mind that big rewards require a considerable amount of time as well as effort.
You can offer a variety of rewards to draw in diverse pledgers. Some backers are willing to pledge $100, $50, $20 or even $5, but that still counts. Create a reward system for each tier, those who are willing to pledge a higher amount needs something substantial but don’t forget the pledgers who are in the bottom. Rewards can be:
- Copies of your project in various formats, both digital and hardbound.
- Limited edition items, signed copies, or customized merchandise.
- Note that offering financial returns and reselling is highly prohibited.
Spreading the word
Your campaign won’t be successful if only a handful of people know about it. If you want to reach your financial goal, make sure people are aware of your project. You need to spread the word to as many potential investors as possible. Increase your network, and ask people to share your campaign with their friends and families.
A crowdfunding campaign is more of a full-time job rather than a sideline. You need to dedicate and commit 100% of yourself to guarantee success. When publicizing your project, show appreciation for potential customers whether they are willing to give financial support or not. Additionally, you need to leverage all marketing channels possible, both online and offline.
- Utilize the power of social media to spread awareness.
- Ask bloggers and media influencers to cover your campaign.
- Drive some public interest by hosting an event or social engagement.
Keep donors updated
Continuing on these tips for a successful crowdfunding campaign, keep donors updated with the latest news and accomplishments on the project. Make sure to include all backers in the loop as you advance towards completion. Regardless of whether it’s a positive update or negative news, it is their right to know what’s happening with the campaign.
Most platforms have built-in tools to allow easy communication with pledgers. Make use of these to inform your backers, either by sending messages or posting updates on your crowdfunding page. The last thing you want to happen is for people to lose interest in your campaign just because you failed to provide regular updates on the project.
- Be honest, consistent, and straightforward when giving updates.
- Transparency is the key to maintaining the interest of pledges.
- Delays are natural and common, don’t be afraid to relay them with your donors.
Be open to change
No product or service is perfect, so be open to change because it’s the only constant thing in this world. Before you even begin submitting a crowdfunding campaign, test and review everything and make necessary improvements as you go. Get feedback from trusted people and refine the product along the way.
You may believe that you have the most amazing service or product possible but that doesn’t mean there’s no room for improvement. With a little effort and work, your product can turn into an outstanding project. If you want successful campaigns, be open to change and:
- Always consider customer feedback and value pledge suggestions.
- Test your project multiple times before launching to the public.
- Make changes as soon as possible, remember that time is of great essence.
Getting funding for your business doesn’t need to be a painstaking process. Utilizing tools like crowdfunding sites can make it easier than ever to reach your goal. Keeping these simple tips in mind can help get you on the road to success.