30 crowdfunding tips for your startup
Crowdfunding is the practice of encouraging people to contribute their money in a project in return of something valuable. In recent years, crowdfunding has become very popular in an entrepreneurial world. It has the potential of generating over $60,000 dollars on an hourly basis. Crowdfunding is considered more of an opportunity to solidify the financials of a company. There are many websites that provide a platform for executing a crowdfunding campaign but because of its increasing popularity, the success of such campaigns is turning into a tedious task, especially for a startup.
Here are 30 crowdfunding tips that may help you for your startup:
- Starting a donation worthy business should be the first step of the whole process. A business with an unique idea that has bright scope in the future, receives higher amount of investment.
- Choose the right platform for campaign. These platforms vary in their focuses and models, catering the needs of a particular field of professionals.
- Select the right type of crowdfunding for the project – it could be rewards crowdfunding or equity crowdfunding. Both have their own merits, and are known to be beneficial for separate type of professions.
- The initial pitch of a fundraising program must be able to grab the investor’s attention and engage them.
- Publishing a video that showcases the products of a company, impresses the users and doubles the success rate of the crowdfunding program.
- A campaign that gains an accelerated start at the beginning is more likely to succeed, so engaging the family, friends and loyal supporters on the first day may add to the success of the campaign.
- Investors will only invest in a project if they know what’s in it for them. Highlight their benefits and inspire them to raise the fund.
- Upload investor’s video interviews, photos and testimonials time to time as it shows the company’s commitment and success rate.
- Select the correct minimum funding amount. It’s very tricky aspect of crowdfunding program and should be tackled by viewing the project through investor’s perspective while keeping the project needs in mind.
- Make different level of pledges with relative rewards. The higher the pledge amount, bigger should be the reward for the backer.
- Allow the people to donate via various methods like online transactions, checks, debit cards or cash, if possible.
- Promote the campaign through social media and other marketing techniques like email blogging, newsletters etc.
- Get a well known company as an investor to show the authenticity of the project.
- Know your audience,divide them according to their status, interests and target them accordingly.
- Keep the investors and backers up to date about the progress.
- Be prepared to answer the questions of a number of investors. A well documented Q&A might be helpful for this.
- People always want to know, whether their money would be put to good use or not, so make a pre-planned strategy and share it with them.
- Decrease the time limit of the campaign. Fundraising programs tend to have better outcomes if they are time restrained. Also, decreasing the time limit reduces the need of frequent updates.
- Funding goal should be realistic and high enough to be taken seriously.
- Examine the failed crowdfunding campaigns and try not to repeat their mistakes.
- Avoid giving the physical rewards to the investors since they are costly and very time consuming.
- Break the campaign into different goals, start with the minimum and then add a new value to the product with each stretched goal.
- Get the word out about campaign before the funding starts. It activates the fans and helps in initial growth.
- Don’t be shy in asking for help. Ask friends and freelancers to help in publicizing the campaign.
- Launch the campaign when there is more probability of getting higher traffic. Don’t launch it during holidays and festive season.
- Do some traditional marketing for the campaign. Distribute posters and flyers in public places.
- To raise the number of backers, one may also try to run the referral contest.
- Don’t give up when the crowdfunding of the project dies out in the middle. It’s the basic nature of every fundraising campaign.
- Market the campaign more in the middle of the campaign time period.
- Don’t forget to thank the investors as it shows that their help is truly appreciated.
Crowdfunding is an effective way of earning customer support and increasing fan base. When done properly, it provides the capital and hedges financial risks of the company. Besides that, it also generates brand awareness and widens the market of the product.