Crowdfunding has become an increasingly popular way for anyone to become an entrepreneur. Rather than being forced to deplete their personal savings or negotiate with commercial lenders, entrepreneurs can reach out a community of backers to support and be a part of their promising ideas. While there is no set formula to guarantee success, here are some top tips that will help steer you to your goal:
HOW TO PREPARE
Your campaign will have the greatest chance of success the more research and planning you do. We would recommend beginning the planning process at least two months before your launch date. The more time you give yourself, the more you’ll be able to refine your campaign until you get it right.
Divide and conquer. You’ll need an excellent team to create your pitch video and images, contact your audience, ship perks, help with social media, and support your overall growth. Don’t do it alone; campaigns with a team raise 94% more than campaigns that run solo. Capitalise on everyone’s skills to maximize your success.
Be sure to drum up interest before launching your campaign; having a strong community and audience excited about your project before your page goes live is a vital part of running a campaign. Reach out to your network to get your friends, family and colleagues involved
Social media is a great tool for building your community and spreading the word about your campaign; it’ll help you understand your target audience and simultaneously attract the supporters you need. Everyone who you interact with is a potential future supporter of your campaign so use the time before you launch to build your database of potential contributors.
For example, The Crystal Maze is a fantastic reinvention of the 90’s classic television show that allows you to play the maze, just as the contestants did. The campaign raised a total of £933,798 and was very active on Twitter throughout. The Crystal Maze’s Twitter account went live in April 2015, months before the campaign launched and they now have 6,280 followers!
Before launching, start expanding your reach through email by building a brilliant database. Collect email addresses through social media, networking events and landing pages and send personalised emails to every person. Don’t wait for your campaign to start to email them; pre-launch emails are a great way to create anticipation for your upcoming campaign. It also helps raise money in the initial days of your launch. As you move from crowdfunding into the marketplace, these are the people that will cheer you on along the way.
GET READY TO LAUNCH
The beauty of crowdfunding is that you can crowdfund anything, but certain platforms will be more appropriate depending on the needs and services you’re looking for.
You only get one chance to make a first impression and your campaign page is your ‘sales pitch’, so make sure that it has been meticulously put together. Your campaign page should reflect you in every way. Be honest and open about who you are, what you want to achieve, why and how you’re doing what you are doing, and what you’ll be using the funds for. The most successful campaigns place high importance on visuals such as engaging pitch videos, clear infographics and professional images. Ensure your pitch text is strong, emotive and contains no spelling or grammar mistakes. We always recommend breaking your text up into sections to make it easier to read.
Your pitch video is also absolutely essential. Campaigns with a video raise 370% more than campaigns without one. It should answer all of the important questions that contributors might have about the five W’s: who, what, where, when and why. We recommend that it be around three minutes or less so your viewers don’t get bored. End the video with a strong call to action to get the viewer excited to be a part of your campaign.
For example, Flow Hive, a campaign that allows its users to harvest honey without having to open the hive or disturb bees hit their target on the very first day. Their video was a critical building block to their success as it explained how their product worked and their story to the viewer. Moreover, it raised a total of £10,131,908, with 17380% funded by April 20, 2015.
It’s also important to set a realistic funding goal. Depending on the platform you choose, you either receive the funds as they come or once you hit your target. It’s better to set the target a little lower and over-fund because contributors are more likely to fund a campaign that’s close to hitting its goal.
Perks are a great way to entice backers to contribute. Your perks should be exciting, but you must be able to deliver them to contributors, regardless of whether you have 100 or 1,000 perks to fulfil. Make them fun and do your best to get them to contributors in a timely fashion. Research has proven that 25 pounds is the “sweet spot”, or the most popular amount pledged to campaigns on crowdfunding websites. Be sure to include a variety of perk prices to suit every wallet.
Ready to launch your campaign, but not sure what day? We recommend avoiding bank holidays or weekends; campaigns should start at the beginning of the week.
GET THE WORD OUT
Launch your campaign in stages. Separate your core supporters from the rest of your database, which should include your friends, family and colleagues, and reach out to them during your soft launch – about two to three days before the ‘public’ launch. Then, launch publicly once you have already hit 30% of your total goal. The rest of your possible contributors, who are strangers, will see that you already have strong support and will be more likely to contribute.
An often overlooked part of planning and executing a crowdfunding campaign is spreading the word through PR outreach. Think about hiring a PR agency that specialises in crowdfunding or start-ups such as Little Bear, or a freelancer, and look for journalists that have covered stories similar to yours. You can use campaign milestones as ways to keep the press interested in your project as it progresses. In addition, consider sharing what you know about your industry in guest posts for blogs or websites in exchange for a mention about your crowdfunding campaign.
KEEP THE PACE GOING
Your launch will create excitement in the community, but you need to keep the momentum going throughout the campaign. Keep contributors updated through emails and social media with your progress on the projects, perks that you add, or campaign milestones. Expect contributors to leave both positive and negative comments on your campaign or social media pages, so ensure you respond to both types of comments in a timely manner. Your contributors want to be part of the journey; show them how important they are.
Finally, once your campaign is closed you don’t have to stop raising funds. Some crowdfunding platforms such as Indiegogo offer services like InDemand which allows you to continue taking pre-orders after your campaign ends. In addition, make sure you thank your backers for their support and continue to update your community on where you are with the product development, manufacturing and shipping. They made your project possible, and you never know when you might need them again!
Joel Hughes is the UK Design, Technology and Hardware Manager at Indiegogo UK – the platform for entrepreneurial projects to move quickly from concept to market. Joel works closely with entrepreneurs and makers at Indiegogo to bring their products to market and seamlessly transition from crowdfunding to commerce. He is passionate about revolutionising the way products are made by giving creators and makers access to capital and supporting entrepreneurs vision for their product or idea.
Joel has more than 10 years of experience spanning retail management, marketing and business development, which has allowed him to develop a set of valuable skills that have been focused on the crowdfunding sector. Prior to his current role, he was the Senior Partnerships Manager at Crowdfunder.co.uk, where he was responsible for developing and managing relationships with corporate and public organisations, resulting in securing more than £2 million in CSR match funding, most of which was made available for crowdfunding campaigns.