By Robert Gerov
When it comes to hot, new ideas, crowdfunding is one of the fastest-growing methods of raising startup cash. Like an informal brand of ABC's “Shark Tank,” the pages of crowdfunding sites range in everything from tech startups to my personal weakness: adorable pets whose owners cannot afford their pet’s much-needed surgery. Other than that, there have also been some extremely successful Kickstarter wunderkinds that have actively changed the game -- from the ingenious LuuupLitterbox to Cards Against Humanity.
The concept of crowdsourcing took off as people who wouldn’t normally put their hands out so informally were provided a venue where that was OK. In fact, it was more than OK. In a world of increasingly-limited resources, young entrepreneurs could see their ideas take flight with the help of their community and technology. As wonderfully simple as this may sound, there are a few factors that can make or break a successful crowdfunding campaign.
First Impressions
Let’s face it: First impressions are everything, and there’s no shortage of content when it comes to scrolling the daily social media feed. Surprisingly, a great deal of that content happens to be pretty engaging stuff, from political posts to “Unlikely Animal Friendships.” There’s a lot of content out there for people to like and share.
So before you post anything, clear your mind and ask yourself first, “Why me?” Guaranteed, anybody who reads your page will be asking the same thing: “Why should we be applying our hard-earned dollars to this?” Create a “who/what/when/where/why” list for your potential donors and find a way to plug that information into your pitch.
Time Is Not on Your Side
Most crowdfunding sites allow users to update whenever they see fit. That's great, but the pitch is everything. Statistically, many crowdfunding sites use traffic and early success as indicators of which projects to feature.
As people, we tend to engage in things the most when they’re either brand new or they are nearing their deadline. So make a big splash from the get-go and don’t slack until you’re through. You can gauge how it goes and depending on that, you may find it necessary to do an extra push as your campaign draws to a close. Be relentless.
Failure to Engage
There is a school of psychological thought in which every character in one’s dream is an extension of him/herself. That school of thought goes even further into one’s waking life, in which every person we interact with in the daily world is a reflection of some facet of ours that we either love or hate. It’s a selfish world when you get down to it. So, in reaching your financial goal, the questions to ask yourself are:
- What does my campaign reflect? Am I really in need? Who/what/when/where/how will the positive outcomes of this campaign effect if it raises enough money?
- Am I reflecting need, promise or both?
Ideally, you are connecting your need for funds to increase your probability for a positive outcome.
Product or Experience Tangibility
People like to feel that they are receiving something in return for their donation, which is why crowdfunding sites typically have a tiered selection of reward offerings. Each is unique. Say, for example, that funding is needed for a season of performances by a local dance troupe and they’re asking for a total of $35,000. Let’s say that the person who donated a $1,000 gets a season ticket, every $100 gets a pair of front section tickets, $50 gets a pair of regular tickets, $25 gets a cool t-shirt, and everybody who donates anything gets featured on a "Thank You" page in the program.
The troupe has successfully engaged its backers, who now have something to gain with the project’s success and a newfound impetus to share and get others to donate.
Now, say your project is something not local and not tangible: a movie. Before you engage a crowdfunding website and ask for as much money as possible, take a look at what you have before you:
You already have your script and storyboards as well as a dedicated skeleton crew. You anticipate the total cost of production to exceed $80,000. As it stands, all you have to present your idea are your storyboards and a short video of you explaining the concept of your film. When seeking production funds, if you break up your project into realistic, tangible segments, then you will be more likely to raise the funds needed for follow-through and completion.
In this example, say you have successfully raised roughly half of the filming budget. You can film as much as you can with that, as well as you can. You now have some beautiful footage that your dedicated editor can cut into a sleek preview. Posting this ready-made preview on the next campaign, the one where you need funds to complete filming, will get more people involved and segue you into the project after that, editing and distribution. This approach is also beneficial in that people can actually see that donations are going towards production.
Financial Planning
In charitable causes, this often plays out as: “The repairs of the kitchen fire should cost somewhere around $8,500. Anything we have left over will be donated to Habitat for Humanity.” or “Muffin’s vet bill is $300. Anything we have left over will be donated to the ASPCA.”
Now with a business idea, engage your donors by letting them feel like they are partners in the business. After all, they are filling the role that a financial partner would fill. The courteous and ethical thing to do would be to clue them in on your business’s plan. What money goes where? When and why? How are you to reach your goal? Nobody wants to spend in vain. Help potential donors understand just exactly how their contributions will be spent.
Make a splash with your idea, partner up with your donors throughout and post your progress. Engage your backers in a meaningful way and they will spread the word for you. Good luck!
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Robert Gerov is the founder of VokSEO, a branding, marketing and public relations agency.