Raising finance to support your project or venture can be the pitfall that stops it from getting off the ground. However, crowd funding is a fairly new phenomenon that can help support your business growth.
This new way of doing business is a two way gain for participants. Whether you’re an entrepreneur, collecting for a charitable cause or just helping your business grow, this is a great way to gain investments and share your success with investors through pledge rewards.
Finding the right platform will help you find a rich audience for your product/ service.There are many crowd funding sites and a lot of which are aimed towards a specific type of campaign.
Here are some examples;
Musicians, authors and film makers – Pledge Music, Unbound and Distrify, Indiewire
Business focused – Fundable, CrowdCube, Seedrs, Crowdfunder
Charity Crowdfunding – gofundme, First Giving, Hopemob
Start Ups – Kick Starter, Indiegogo, CircleUp, RocketHub
The sites take a proportion of the capital raised which differs between the sites, but it tends to be around 3- 6%.
It’s All About The Pitch
You need to ensure you have a clear compelling story that will make people want to invest in your business or idea. A lot of crowd funders now use video to tell their story. This is a great way of getting people to get to know you and to buy into you. Kick Starter has found that campaigns with video story telling have a higher success rate than those that don’t.
Telling your story is important. It needs to be interesting, engaging and most importantly full of information that will make the backers trust in your idea and invest in you. If the cause is for a charity it is important to make sure that you state clearly how the pledges will be spent. Transparency and delivering on your promises is necessary or else you run the risk of your backers feeling deceived. This could prevent you from receiving traction and backing for future campaigns.
Set Realistic Goals
A lot of the sites will require users to put a time limit and budget on the site, so it is essential these goals are realistic and achievable.
Committing and delivering on realistic rewards for backers will not only involve them in your success but they are likely to continue to show longevity in their support. We all know how powerful word of mouth is for business!
Rewards can range from intangible gifts such as your own gratification that you have improved somebody’s life and tangible gifts such as a T-Shirt or DVD. To get ideas for rewards go onto the sites and browse for similar crowd funding campaigns in your remit.
Any crowd funding you do should be treated as a campaign. Careful planning will help get your message across effectively and to right people. Effective planning will help you manage the duration of the campaign and you will easily be able to document progress.
Posting updates throughout the duration of the campaign will not only keep backers in the know, but it may also attract new backers.
Jerrard Wayne Tips
To stop your idea/product from being replicated, launch a crowd funding campaign once you are ready to go to market.
Building trust is important so make your rewards are attractive to investors and remember to stick to your commitments. If you have promised backers freebies and offers, follow them through.
Engage with your family, friends and contacts by encouraging them to back you to get the ball rolling.