Unlike a few decades ago, entrepreneurs have a much more viable option to finance their projects or ventures without having to worry about how to pay off the money and manage a plethora of documents needed to obtain it. Commonly known as “crowdfunding”, this method of raising cash is not only simple and straightforward, but also quite rewarding. Usually when financing was “simple” there was always catch.
However, crowdfunding’s convenience and cost-effectiveness has proved it worthy for any venture, be it big or small.
The one and only troubling question, however, is how do we make it a success? While some ventures seem to be getting large amount of fundings and popularity, others seem to be struggling with their efforts. How is this happening?
In this article, we will include a couple of tips and tricks on how to make your crowdfunding campaign a big success. The most popular and successful campaigns include all of the following…
1) Several Months of Planning: Don’t rush the planning phase. Remember, the first impression you make might be the last. You don’t want to un-impress your fan-following by making major mistakes during the launch. Successful crowdfunding campaigns have gone through considerable planning, testing, and preparing before the final “launch” takes place. According to Phil Bosua who raised 1.3 million for his LED lightbulb project, “Every hour of planning you do before the campaign saves you 100 hours of work after it”
Give your planning phase at least three to six months before the launch.
2) A Video: According to the co-founder of the site Indiegogo, Danae Ringelmann, and her interview at Inc, crowdfunding campaigns that include a video are 115% more likely to win funds and achieve targets compared to projects that don’t include a video. She says that they highly recommend a video on her site because it makes the campaign appear “personal” and “authentic”. Clearly, with all the elements of communication involved, the entrepreneur is more likely to convince a handful of investors and build a personal connection with the people watching.
3) Appropriate Length of Campaign/Video: The best campaigns are also characterized with short, quick messages that don’t waste an enormous amount of the follower’s precious time.
This includes the campaign video, as well. It is highly recommended that the video be short in length, but long enough to make an impact. Entrepreneurs often have trouble deciding on how much time it should take to “make an impact”. The ideal length of a video is is less than 2 minutes. In addition, you should be able to send out your campaign’s most important message during the first 20-30 seconds because that is usually the amount of time viewers watch a video before the tap out of it.
Furthermore, the ideal length of the entire campaign is within a month. Any small business with monetary goals that are less than $100,000 should be able to adequately make the desired impact through their campaign within a month. Campaigns that have large investment plans might take more than a month. However, the longer it takes, the less likely it is to obtain sizeable amounts.
4) Regular Updates: Just like any other online initiative that requires a constant fan following, crowdfunding also requires regular updates and frequent posts to keep the followers “hooked”. It is best to give daily updates on your project and reveal highlights on how it has been moving forward.
The best campaigns are willing to share their accomplishments, behind-the-scenes activity, related articles, videos, the entire team, and other useful posts that allow the followers to know more about the project. It is essential to be transparent because gaining the backer’s “trust” is a central part of the campaign.
5) Solving a Problem: The most effective pitches are those that are solve a problem. Get this: your potential investors are not interested in what you are making and the “features” of the product. They want to know how you are solving a problem and how this cause affects them or people as a whole.
Some of the most effective campaign runners pointed out they didn’t start out their pitches by naming the products and the specifications. They spent a substantial amount of time coming up with the most effective pitches that focus on presentation and how their initiative(s) will solve a problem. So, instead of focusing on themselves and the money they need, they focus on the crowd and their needs that are going to be satisfied.
6) Target the Right Audience: In order to make your crowdfunding a big hit, you also need to be aware of the market situation and the right audience. If your project demands a small amount of investment, you could possibly fulfill your financing needs with just family, friends, and other personal contacts as investors. If, however, you require a substantial amount, your backers would extend the “personal” network and you would have to leverage connections beyond the typical social circle. One of the best ways to leverage just the right connections is to find out who would be interested in your product.
According to Justin Massion, a the marketing director behind the successful crowdfuding campaign of “Space Command” that raised $221,000, says it is best to reach out to that crowds by targeting individuals with large fan followings. For example, you might want to reach to journalists who have a big social followings and can write about your campaigns. Or if you have an actor on your team, you can utilize their social circle to create a large fan following.
7) Bear the Brunt: Even if your campaign seems to be going downhill after the first few days, it doesn’t mean that you can’t do something about it in the time you have left. Some of the best campaigns have the quality of being highly resilient and constantly piecing together their cause into something authentic, credible, and note-worthy over a period of time. A funder could be willing to invest before the closing date of the project. During that time, an initiator would spend time updating fans regularly and increasing support through attention and avidity.