Crowdfunding platforms can open doors for entrepreneurs because they offer access to capital without having to navigate through the complicated traditional channels such as venture capital and angel investors. In addition, crowdfunding provides entrepreneurs with a way to engage their customer base and involve them in the exciting start-up phase of their company, all the while getting their product out into the market.
So for all of the budding entrepreneurs out there with big ideas and dreams of making them a reality, here are ten tips I have learned from my experience running a crowdfunding campaign:
1. Create a prototype of your idea. Crowdfunding campaigns are most successful when you have built the foundation of the project and are now asking for support to help take it to the next level. It also shows your belief in the project as you have invested time and personal money in the venture, which will support the all around credibility of your campaign.
2. Pick your platform. As the popularity of crowdfunding increases, so do the number of platforms available. Kickstarter and Indiegogo are the two largest (note: Kickstarter has U.S. and Brisih residency clauses, but just announced it is opening its doors to Canadians “late” this summer, you can register to stay up to date here). Other platforms to look into are: Crowdfunder, RocketHub and Quirky.
3. Build your project page. Research similar projects that have been successful and make note of the type of detail they included on their page. Your project page is your opportunity to sell your idea and engage potential supporters to become involved in what you are doing and contribute to your campaign, so make sure it is well written with a clear objective -- and includes pictures!
4. Include video. Campaigns with short videos (less than 3 minutes) are 50 per cent more successful than those without. A digital camera or smartphone will do just fine if you don’t have access to more sophisticated equipment. It is also useful to watch the videos of similar campaigns to yours to see how they made them.
5. Decide on your perks. Perks are what people get for contributing to your campaign -- they’re the incentive to get involved. If you’re launching a product with a tangible good, you should offer this as your perk. If you are raising money for an artistic endeavor then offer some way for the contributors to get involved, like a visit on set of a documentary, or previews to chapters of the book you are looking to publish. Be sure to include a $25-level perk as, statistically this is the most contributed dollar amount to crowdfunding campaigns.
6. Set up your payment structure. Different sites use different methods of payment, so make sure you look into what is required to set it up on your chosen site seven to ten days before you plan to go live. Indiegogo uses PayPal, but you need to upgrade to a premium account and verify your bank information, which can take up to seven days. You don’t want to be all ready to go live and have no avenue to accept funding!
7. Build a media list. Research relevant media outlets to your project – include online magazines, newspapers, blogs and YouTube channels. Make an excel sheet with the name of the media outlet, the type of content they write on, as well as contact information. If you know anyone (friends of friends) who is an influencer, reach out to them to engage and involve them in your campaign. Your media list is never complete, so keep adding to it as you come across new blogs and journalists who you think would be interested in your story.
8. Start pitching the media. Write a skeleton of a pitch that describes who you are, what your project is, and why you are crowdfunding to get it off the ground. Beyond this core information, each e-mail should be tailored to the specific person/publication you are addressing. Include something you like about their site, or reasons you find their content engaging and informative. Keep these e-mails short and to the point, as bloggers and journalists receive hundreds of pitches a day. Start reaching out a few weeks before you plan to launch your campaign and then follow up once it is live. Only a small percentage will respond, which is why it is important to be persistent and continue to build your list and follow up.
9. Reach out to family and friends. Friends and family are going to be the backbone of your campaign, so be sure to get them involved early. A few weeks before you plan to go live send an e-mail to your extended network of family and friends telling them about your upcoming project, explaining what crowdfunding is, and preparing them for launch day.
Two days before you launch pre-write personalized e-mails that you will then set up to send out the morning of your launch. Yes, this is a lot of work, but you are asking for their money and support -- people are more likely to respond to a personalized e-mail than to a mass distribution list. You should depend on friends and family for the first 20 to 30 per cent (and ideally get them to contribute in the first few days of going live). Statistically, strangers start getting involved in campaigns beyond the 20 to 30 per cent funded mark.
10. Keep the energy going: After the initial burst of activity that will come with your launch, the next phase is keeping up the momentum. That means focusing on getting more press and spreading the word about your exciting new project. Staying engaged and involved is key. And make sure you send frequent updates to your supporters. Updates are notifications that are sent to your contributors, or anyone who has elected to “follow” your campaign to keep them up to date on your progress. They can be anything from pictures, to recent press coverage, to what work you did on your project that day. Campaigns with more than 30 updates raise 400 per cent more funding than those with zero to five updates.
Michelle Shemilt is the founder and CEO of Nudy Patooty, a women’s intimates line that prevents embarrassing perspiration stains, preserves designer clothes and reduces dry cleaning expenses. She is currently pre-selling her line at a reduced retail rate to raise funds for her first production order via a crowdfunding campaign on Indiegogo that will be active until July 18.