We live in the age of the entrepreneur. And, thanks to the number of crowdfunding platforms available, it’s possible for anyone to launch a business idea, product, or concept without access to traditional resources.
Nonetheless, it will take more than a great idea and a few strategies to successfully crowd-fund a campaign. Below are a few tips for generating a memorable and fruitful crowdfunded project.
It’s not as easy as pie.
Because crowdfunding has worked very well for some and produced tens of thousands of dollars for all kinds of ideas, including the potato salad guy, the consensus is that getting funded is a piece of cake. Not so. For every potato salad story, there are thousands of people out there who were unable to meet their funding goals.
The first thing to consider before undertaking a crowd-funded campaign is to clearly identify your objective. Determine how much money you want to raise and what you will do with the funds once raised. This will help you craft an interesting and compelling story about why you are seeking money. Describe the product, service, idea in detail and discuss how it will solve a problem(s) and how it will serve the target market / general public.
Content is king.
Once you’ve laid the foundation for why you are launching your project and how it will work, distinguish yourself from the competition. Along with your story, plan to include beautiful images or compelling videos to demonstrate, explain, or show why people should pay attention to you and invest NOW.
It is who you know. Review and create a list of names from your personal database that will support your crowd-funding journey at the outset. Your close circle of friends and family are most likely to become your first investors and the ones that will help promote your campaign via word of mouth and social media. In fact, most successful campaigns raise the first 25% of funds from within this close circle.
Before you are ready to launch, identify and seek out the online audiences that will be most receptive to your idea. Find relevant blogs/bloggers that might write about your project and contact them. Perform social media searches on people that may have an interest in your campaign. Initiate organic conversation early on with these folks through their social media channels by responding to their posts and comments or by asking questions relevant to topics they like talking about. This is a nice way to develop a relationship with them before you make your presentation about your crowdfunding initiative once it goes live.
What’s in it for them? In the unique case of our platform, Your Music Company, crowdfunders earn royalty based financial rewards. But, other crowd-funding companies such as Kickstarter and Indiegogo incentivize investors with prizes such as VIP access to events, concerts, merchandise etc. It is important to start off with a list of real-life rewards that your funders will find valuable AND that you can actually provide. Ask social network connections for suggestions about prizes they would want to receive.
Turn it on.
Once all of your ducks are in a row, launch and promote your project. Make sure to update the campaign on a regular basis. Stay close to your investors. Communicate and keep them in the loop regarding any new developments and milestones. Continue the excitement by letting investors know what stage of the crowdfunding phase you are in. Respond to all emails. Don’t ignore any interest directed your way. If someone makes contact with you, get back to him/her in a timely manner. Your campaign needs your attention and must take top priority from beginning to end in order for it to be successful.
About the Authors
Yael Benamour and Christel Gidouin, female entrepreneurs who recently immigrated from France to the United States, are the founders of the crowdfunded music platform and record label, Your Music Company (YMC). The company operates like Kickstarter for musicians, but rather than receiving prize incentives, those fans who donate (called “fanvestors”), are paid actual royalties based upon the artist’s iTunes sales.