The post was written by Seedkicks, a crowdfunding portal that helps entrepreneurs raise capital to fund their business.
Crowdfunding is a great way for entrepreneurs to access capital, gain social proof, and promote their brand. Traditionally to start a company you would need to pay for inventory out of pocket and then go sell it. With a successful crowdfunding campaign, you can launch a company without a ton of upfront capital by pre-selling your product. This allows you to raise enough money for the first production run.
There is more to a crowdfunding campaign than most people realize. We’ve outlined 10 steps to increase your chances of success.
1. Educate yourself about crowdfunding and choose the right platform
Having a successful crowdfunding campaign takes time, preparation, and hard work. The more you know about crowdfunding the better. Find similar campaigns to see what has worked. Look for market and price trends for rewards. See which press is writing about those campaigns and maybe reach out to the entrepreneurs for advice.
Choosing the right platform is more important than you might think. The obvious choices would be Kickstarter or Indiegogo, but there are pros and cons to going with one of the giant platforms. Every platform works in a different way – some specialize in certain industries, while others offer guidance and more hands-on packages. It’s important to pick the one that’s best suited for you.
2. Build pre-campaign momentum
Start marketing your campaign at least one to six month before you launch. Build your social media following and contact list, have people sign up for pre-orders, and reach out to press with a teaser video. Your goal should be to have 30% of your funds committed before you launch.
3. Gather contacts and evaluate your network
We recommend dividing your contacts into five groups, based on circles. Group 1 starts with your close family and friends all the way to group 5, which is relevant press/bloggers. Evaluate your network to help you choose your funding goal (see below).
4. Choose your funding goal
You want a number that is high enough to achieve your business goals but low enough that you are confident that you can reach your target. Compare how much capital you need verses how much capital you think you can actually raise. If the amount you need is drastically higher than what you think you can raise, consider raising money in multiple phases. Instead of trying to raise enough money to cover every cost and every milestone, just raise enough to get you to the next major milestone.
5. Develop your story: Video and Campaign page
Use your video and campaign page to get people excited about what you are doing. The more effort you put in the more likely people are to support you. People don’t want to back a haphazard campaign. Explaining how you turned your idea into a reality and why you need support is just as important as your actual product.
6. Entice people with rewards
Rewards are a great way to thank your backers and entice people to contribute more money. You should have 5-10 rewards at different price points to give people options. On the lower end you can offer a handwritten thank you card or a t-shirt. For the higher end rewards focus on custom product designs or VIP/private rewards.
7. Create a marketing plan and template everything
This is arguably the most important element of a crowdfunding campaign. If you expect to throw up a cool video and raise a $100k you might be in for a rude awakening. You need to tell everyone you know about the campaign and have your network tell their friends. Come up with a plan to leverage your network through social media, e-mails, personal phone calls, and networking. Your marketing plan should also include a strategic way to reach out to press to have them write about your campaign.
Template everything. This will take some organization and planning, but will save you so much time come launch day. Draft outreach e-mails, thank you notes, campaign updates, press release, and schedule social media posts (bufferapp.com is a great tool).
8. Launch time
This is the day you’ve been waiting for. After months of preparation and planning, it’s time to execute and share your unique vision with the world. While your campaign is live, dedicate time everyday to promote your campaign, read comments, respond to e-mails, thank backers, and send updates. Interacting with your supporters is crucial to building a loyal community for both your campaign and your company going forward.
Even though you’ve spent months planning, it’s important to do weekly evaluations during your campaign to make sure you are on track to hit your funding goal.
9. Throw a kick off party
A kickoff party is a great way to gain momentum on day one. Invite your close friends over for pizza and beer (or wine and cheese). Give them a brief introduction of what you are doing, have a tablet on hand for them to contribute, and encourage them to share the campaign link on social media.
10. Track everything
Track who contributes, what rewards are the most popular, and everything else in between. When people contribute thank them and ask them to share the campaign link with their network. If people haven’t contributed send them friendly reminders.
This is by no means an exhaustive list. Navigating your way to a successful crowdfunding campaign can be tricky and there is no guarantee you’ll be prosperous. It takes doing your homework and being diligent with the process. For many people, it’s overwhelming and hard to know exactly what to do, which is why picking the right platform is so important. No matter what happens stay focused and follow your passion. Hard work usually pays off, in one way or another, but that’s another blog post in itself!
What other tips have you heard for a successful crowdfunding campaign? Share below.