Have you ever thought about starting your own business? In the current economic climate, it may be difficult to find funding via traditional ways (such as bank loans). Even angel investors are an highly solicited, sometimes leaving aside a lot of people with brilliant ideas and ultimately missing some great opportunities.
However another solution could offer you a new way to finance your project, whatever it may be. That solution is called crowdfunding. Crowdfunding isn’t a new idea, as the practice has been used since the 18th century. However with the emergence and growth of the Internet, its field of applicants and supporters has broadened greatly.
The goal is for entrepreneurs to ask the public to financially contribute to their projects in exchange for a reward or out of sheer generosity. Why limit yourself to one business angel when you can have hundreds?
Today, Kickstarter is one of the biggest crowdfunding websites on the web. Since its creation in 2009, it has contributed to the successful funding of almost 55,000 projects, with a total of over a billion dollars being contributed. 5.5 million people helped those projects getting funded with nearly 14 million pledges.
One of the biggest success stories thus far is the Pebble smartwatch. The project was so successful it raised 100 times its initial goal by the end of the funding period. Eoin from the connector360 team even has one!
Ireland also has its own crowdfunding websites. Fund It has enabled projects to raise more than two million euro from the ‘power of the crowd’. Fund It works similarly to Kickstarter, allowing entrepreneurs to assign different rewards to different pledge levels. However, Linked Finance – another Irish crowdfunding website – allows the crowd to propose loans at a fixed interest rate. If the loans are accepted by the entrepreneurs, funders will get back the amount loaned, plus interest, usually starting one month after the funding.
All these success stories might make it seem like crowdfunding is the obvious solution to all funding problems, but this is not always the case. A rewarding campaign is hard work, comparable to a marathon that can last from 30 to 60 days. No matter how amazing your idea, artwork or music may be, nobody is sitting around flipping through platforms, waiting to donate to you. It is up to you to create a hook that entices your contributors to make them believe in your vision. It is up to you to use the power of social media wisely and strategically.
Do you want to try crowdfunding for your next project? Here are connector360’s top 5 tips for making your crowdfunding campaign a fantastic success, and not a fallacious flop.
1. Choose your platforms wisely
As stated above, driving your campaign is a grueling process and you don’t want to spread yourself too thin. It may not be necessary to push your message on every online platform. To have any form of success, it is likely you will need to be active on Facebook and Twitter, where there is the largest volume of audience. After that it all depends on where your audience is. For example, if your project has strong audio/visual impact well then YouTube or Vimeo may enable you to reach your greatest audience.
Starting a blog will be useful no matter what your project may be. It offers you a platform to drive traffic to your site should the donor want more detailed information. It will also allow you to keep them informed on your progress once the campaign is over.
3. Be realistic
Do not overestimate what you can achieve. Aim to under promise and over deliver. Project director of Fund It, Andrew Hetherington, has stated that campaigns of less than €10,000 have the greatest success rate. If it is a project that requires a larger amount, break up the campaign into more digestible chunks. For example if you were making a film, crowd source for production and marketing/distribution at separate intervals.
4. Crowdfunding starts well in advance of campaign launch
If you are not already active on social media, it is important to build your audience BEFORE you start a campaign. It is simply too overwhelming to do both at once. Don’t focus on your campaign or content ‘going viral’. Instead, focus on making it as vibrant, consistent and relevant to your audience as possible.
5. Say ‘Thank You’
Do not take the money and run! Once you have achieved your goals – and even if not – be sure to follow through on any rewards you promised in return for donations, and be grateful to those who helped make your ideas reality. You can, for example, send personal rewards with perhaps a handwritten card or message. It is also important to keep funders up to date with your progress with continued updates to social media/blog etc. Even if things are delayed or not going to plan, it is important to let the crowd know. The last thing you want is for them to feel like they have been fooled!
While crowdfunding may not be a walk in the park, a successful result will not only give you financial support, but will also give you a strong social base that will encourage you and show that others believe in you and your project! Most people on completion of this journey will recall it as a positive and fulfilling experience. So what are you waiting for? It’s time to bring your best ideas to life!