You have vision, drive, and the passion to succeed - but unfortunately you need funds to turn your great idea into a tangible reality. In the good old days, your bank was the first place you would head in order to secure a loan, but things have changed. Banks require accounting statements, tax returns, and stellar credit reports before you are considered eligible for even a small loan. As they say, necessity is the mother of invention, and it’s the recent credit crunch that has led entrepreneurs just like you to seek funds using other, more creative venues.
What is Crowdfunding
Crowdfunding is the relatively new kid on the block when it comes to raising money from strangers. Sites like Kickstarter and Indie Go-Go have created crowdsourcing platforms that allow investors to connect with entrepreneurs, inventors, and creative thinkers. The platforms are relatively easy to use and they rely on a few basic principles to reach success; namely, self promotion, preset fundraising goals, and reward offerings. Potential investors can log on and search for ideas they wish to donate funds to, once you post your campaign, you become visible to all types of investors across the world. Investments can be large or small and just about anyone can give. This allows fledgling investors and venture capitalists alike to donate without having to become accredited by the government.
Become Pitch Perfect
Whichever crowdfunding site you choose, you must develop a pitch. Your pitch should be short, sweet, and to the point. Investors on these sites want to quickly scan what’s available, since there are a plethora of fund hungry creatives out there in need of cash. Make sure your pitch is potent. Believe in your idea, let your passion and drive shine, and get the facts in while still allowing your brand culture to come through.
Break up the Empire
Large campaigns are not always the most successful on crowdfunding sites. One of the main reasons investors browse these platforms is to seek out and help the little guy. This means that it may be better to break up a large campaign into smaller parts to garner the most attention and feedback.
Know Your Audience
Before choosing a crowdfunding site, be sure you can hone your pitch so that it relates to your audience. Kickstarter and Indie Go-Go are more creative oriented. For more professional, small business oriented sites, check out Fundable or Equitynet. Browse other campaigns, check out what types of investors have already donated, and scan the platform to make sure your promotional media can be displayed and shared. This will help you determine which site and audience demographic will work best for your product, service, or idea.
Focus on the Middle
Simply creating a campaign is not enough. You must keep potential investors engaged from beginning to end. In most cases, investors’ interest is first sparked by the newness of your campaign, and then they will usually check back close to the deadline. You must harness the power of the middle. It’s during the middle of your campaign that you should be sending out emails, posting on social media, and updating on new developments. Keeping active and maintaining consistency is the key to a successful crowdfunding campaign.
Reward the Masses
If the site you choose is reward-based, be sure to offer meaningful incentives to investors. This could range from first looks, meet and greets, discounts, and free products. Incentives make investors feel they are getting something tangible out of their investment, so make rewards worth their while.
Crowdfunding has opened so many doors for the fledgling entrepreneur. Take full advantage of what these sites have to offer by doing some analytic research before launching your campaign. Make sure when building your platform to tell your story and incorporate your personality. Realness sells far better than smoke and mirrors.
Image via Sprectrum