Crowdfunding has caught on among entrepreneurs in need of funding for their start-up ventures and numerous business incubators across the country now offer information on crowdfunding sources. Crowdfunding veterans know that the fundraising campaign is won or lost before the campaign goes live and that the most important decision a campaigner will make is to choose the most suitable platform for the business or project that will be funded. Please see my March 3rd post for a sampling of crowdfunding platforms.
To get an insider’s understanding of how a smart crowdfunding campaign is created and managed I spoke with Alice, a neighbor who is a documentary filmmaker. Alice said that she spent about 8 – 10 weeks, working about 4 -5 hours each day, to prepare for her campaign kick-off and another 4 weeks or so running and managing the campaign while it was live on Indiegogo. The post-launch phase was easier, focused on follow-up and updates.
To create her campaign, Alice asked a friend to build a 6 page campaign website, she filmed a pitch video (she is a filmmaker, after all) and developed a synopsis to further explain and “sell” her film concept. She even planned a small campaign kick-off party to encourage friends and family to participate on day one and create momentum and good results that often make the difference between reaching the fundraising goal or falling short.
Once the campaign was in motion, Alice estimated that she spent about 10 hours/ week on upkeep during the second, post-launch, month. This phase involved follow-up, consisting mostly of engaging updates and donor outreach on social media and in emails.
Keep at top-of-mind that your campaign is unlikely to succeed without a total commitment on your part. Think of crowdfunding as a full-time job while you’re driving your campaign goals. Leverage every relationship and marketing channel available to you. Crowdfunding campaigns are a lot of work but if you build it right, you can possibly meet and or even exceed your funding target.
Help potential funders understand how backing your product or business idea can benefit them. Tell them who you are, what you’re planning to do, where the project idea came from, what your budget is and why you’re passionate about it. Show that you’ve thought through your idea, which helps prove the legitimacy and credibility of your project. Communicating your story through visual imagery is particularly effective and many successful fundraisers create a 5 (or so) minute video.
Make sure to create an eye-catching campaign landing page image as well as a persuasive video pitch. The video quality must be good, your story must be clear and compelling and your product must shine. Show that you are knowledgeable and articulate as you clearly outline your concept and the benefits and demonstrate exactly how it works.
Connect emotionally by expressing your story in a way that helps potential backers to relate. Show and tell why your product is desirable and unique. People need to know what problem you can solve and why the solution will appeal to target customers. Be advised that your backers are of primary importance. When you show them that you care, they’ll be more willing to trust you and may even reach out to friends to share your campaign with them.
Research your business start-up or expansion costs. Prepare 12 month P & L and Cash Flow Statements, plus a Break-even Analysis, to confirm with confidence both your expenses and when you expect that sales will equal and then surpass expenses. Furthermore, be realistic about your fundraising potential as you estimate how many of your friends and family might be willing to donate. Based on that information, set your fundraising target. Alice predicted that while your campaign might attract the attention of new people, most of your support will come from those who know you. BTW, your fundraising goal cannot be changed once you’ve started the campaign.
People will support your project if they think it’s worthwhile, but it’s always good to have interesting donor perks, since people expect a little swag. You might check out the Kickstarter Creator Handbook to figure out what you can and cannot offer, as there are some common restrictions that you’ll need to know. Also, be mindful as you structure your rewards in terms of price points. It’s fine to promise big rewards, but remember that delivery can take considerable time and effort.
Promoting and updating
Your Crowdfunding platform may have built-in tools that allows campaigners to update project backers and send messages to them and you should take advantage of these tools. Email marketing, your blog or newsletter (you might create either or both for the campaign) and social media can be effectively employed to spread the message about your campaign and its progress. Continually keep your project backers in the loop as you move forward with the campaign. Fail to share regular updates and you risk losing donor interest and that can result in a smaller donor pool. Be positive, yet transparent, in your updates. If things aren’t going quite as anticipated, let folks know.
Encourage product feedback
One of the most important things to do before starting a crowdfunding campaign is to run a beta-test and obtain some product reviews. Feedback is essential to making helpful product or process improvements before launching the campaign. You may have an amazing product or service, but that doesn’t mean it can’t become even better with a little extra work.
Deliver on rewards and promises
Your crowdfunding campaign isn’t over if and when you reach your funding goals. It’s over when you’ve fulfilled your promises. This means completing your project, delivering your perks or rewards and continually communicating with your supporters. Only when fulfillment is complete can you truly say you had a successful crowdfunding campaign.
Thanks for reading,
Photograph: ©Lai Afong, Hong Kong photographer and founder of Afong Studio, one of the first in China. Afong was considered the most influential Chinese photographer of 19th century China. His photograph shows men betting on and playing a game of Fan-Tan in Canton (Guangdong), China circa 1890s.