Tips to a Successful Crowdfunding Campaign
Crowdfunding can be an effective tool in the early stages of fundraising for your startup. However, if not done correctly, you can easily fall into the category of failed projects. Use the tips we have provided to help guide you to a successful campaign.
1. Pitch a Product or Service That Will Interest Consumers– If this sounds obvious, it’s because it is, but also necessary to understand. You are pitching to the crowd, so it is important that what you are selling is something they want or need. Consumer products will have more success than business to business campaigns.
2. Tell An Appealing Story– With crowdfunding, backers are going to be more interested in your story than the facts. Although facts are important for credibility, stories sell. Share any personal stories like obstacles you were faced with along the way, if any major life or career event was the reason you created the campaign, or why the problem you are solving is important to everyone. You can also talk about your venture’s vision and mission. You want to create a connection with your audience and show you are passionate about your project. The tone friendly and personal to keep the crowd engaged. This will prove your genuine and keep you from sounding desperate for backing.
3. Keep Your Backers Updated– Keep your backers updated as often as you can. Let them know your plan and progress. This can be done through social media or email. Send thank-you emails to investors and there are any questions or feedback respond quickly and encourage conversation and engagement. It is a good idea to tailor engagement to your specific business. Backers deserve to know what is going on with the product they invested in, even when the campaign is over.
4. Be Transparent about Costs– In order for potential backers to understand why you are asking for the amount of money you are asking for, you must be transparent about how you are going to spend it. If investors do not have experience in the field your venture is in, then they likely do not know what it takes to create your product. Letting them know exactly where their money is going will assure them that you are not spending it on unnecessary items.
5. Add a Buffer– Most businesses fail due to lack of funds. You want to factor in any possible unforeseen costs into your campaign’s target amount.
6. Provide a Valuable Incentive- You want to make sure the reward you are offering is enough of an incentive for people to back your project. Ask friends, family members, and even the fans themselves for what they would want as a reward. It can be easy to come up with cheap or even free options. These can be buying rewards in bulk, a Skype date with influencers, a free download, a right in naming something in the project etc. You want to make sure whatever your reward is that it brings value to the backer, and that it is delivered within the amount of time you say it will be.
7. Be Smart with Your Promotion– Tap into your personal connections and social networks to get the ball rolling on your campaign. Ask friends, family, and followers to share your project to expand your network and help circulate your message.