Crowdfunding can be a great way to raise capital for your startup. As a founder you’ll face many challenges, and raising capital is vital to your company’s survival. But you can’t just launch a campaign and hope for the best! Whether it’s on Indiegogo, Kickstarter, or another platform, here are some best practices when it comes to running a successful campaign.
Know what you need, not what you want
What will you use these funds to do? Do some research to see if it’s best to put your money into product development cost (for the software and hardware), or salaries (overhead), or logistics and distribution. It’s likely you’ll need a mix of all three. What’s it look like if you have to make 300 units of something? Just 20? One of the best ways to research this is to look at what others have done — and most platforms are very open about their successful campaigns! Also, talk to people, explain what you’ll deliver. Do they understand what the money will be used for? If you can’t explain how the money will be spent, your campaign is unlikely to meet its goal.
Marketing
You now have a rough idea of how much money you need to raise. It’s time to sell the idea, the product, and your team. People are more inclined to contribute money if there are specifics. Point out why the product is needed and why your team is the one to make it happen.
Make a video showing why this product needs to be made. State the problem, and why this product specifically solves it. It’s important to create a compelling, professional looking video that can be understood. Have a professional logo made, create social media accounts created (Facebook, Twitter, Instagram, etc.) and start building hype around the idea.
Take time to craft a great description of the product, and use that same messaging relentlessly. Go into details about what it is, and how to use it. You’ll build trust as you show potential customers you’ve thought of their every need. More on marketing…
Special Offers
One of the appeals for crowdfunders is the feeling of “getting in” on the ground floor of an idea. So, add some special offers for these early adopters. Make their donation worth their time. If I’m going to invest $100 into YOUR campaign I expect $200 worth of stuff in return. Make your backers happy! A common method is to offer a low-price compared to retail for your product plus promotional items like a shirt, a mug, anything that you can send now which instills trust.
Keep them Updated
Backers took the time to give you their money, and expect updates about how you’re doing. It’s important to keep backers happy, and one of the easiest ways is to keep them posted on the weekly progress. This could include design work, prototypes, production samples or just a quick note about the status of things. Make sure they understand your timeline, let them know if you’re hitting these milestones. Even if you’re going to miss a deadline, that is absolutely fine! Just let your backers know. Make them feel like they are part of your journey.
Conclusion
You want to start your company with a solid foundation. Create trust, develop a network, build a community around your idea. By following these steps your crowdfunding campaign will be successful, and lead you to fulfilling your promises.
Written by: Frederick Bravey & Victor Agreda
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