To start a business, you need seed money — something to work with in order to get started and get through that first round of expenses. There are a few different ways to get that money including: saving up your own money, taking out a loan, asking for investments, and crowdfunding.
That last one is a clever way to get seed money from your target market without putting yourself in crippling debt. If other methods of getting startup money don’t sound right for you, consider crowdfunding.
Get enough people interested in your product willing to give you a few bucks and you have your start-up money. Because of its nature though, crowdfunded projects have become increasingly common, making it harder for people to stand out.
If you want to reach your crowdfund goal, you’ll need to know how to attract an audience, entice them to donate some money to you, and be able to resolve any concerns they have.
Have a Prototype with Pictures and Videos
Nobody wants to crowdfund just an idea. It might sound super cool and amazing, but unless you prove you have the skills to make good on those promises, nobody will believe you. Before you make the crowdfunding page for your project, you need a proof of concept.
Depending on what your project/business is, that could mean having a working prototype, a blueprint or detailed plan for the project, or something along the same lines. It doesn’t need to be pretty or finished, but it needs to show potential backers it does what you want it to. The further along you are in development, the more likely potential backers will invest. A working prototype is better than a blueprint, and a finished prototype is even better than that.
You need to take high-quality photos of your prototype that can give backers a good idea of what you want to make/sell. That doesn’t mean snap a few blurry photos with your phone and call it good. Use a nice camera with proper lighting, even consider hiring a professional photographer. Additionally, make a video that details out both your plan and the prototype. Give backers plenty of visuals and information so they know what they are funding.
Choosing the Right Crowdfunding Platform
Not every crowdfunding website is created equal. For whatever you want to do, you need to pick the right platform in order to get seen by the right audience. Being on the wrong site can push away potential backers, and how the site monetizes needs to be researched too.
Here’s a list of crowdfunding platforms and what they are commonly used for:
- Kickstarter: Typically used by creatives looking to make a final deliverable or product. If you don’t reach your goal, you won’t get any of the money.
- GoFundMe: Mostly used for personal projects/needs instead of a business or product. Many use it to help pay for medical expenses. Need to reach the goal in order to collect.
- Indiegogo: Used by most industries in order to fund projects. No specific niche is attached to it. They will let you collect money even if you don’t reach your goal, but they will charge more for not meeting it.
- Patreon: This is a subscription based model where backers continually pay for a service or product. If your business plan is subscription based or constantly ongoing, this is the platform for you. Patreon makes backers pay the fees, paying 2.9% plus $0.35 per pledge.
- Rockethub: This platform is much more designed for businesses and entrepreneurs looking for money to pursue a risk or grow their business.
This isn’t a full list of every crowdfunding platform, but these are the most popular. Do research into which platform matches your idea/product, business, and target market best. Then, work with the platform to best highlight your pitch and use every tool at your disposal.
Getting Extra Eyes Through PR
The more people you can get to look at your idea, the better chance you’ll have to reach your goal. Thousands of great ideas die on crowdfunding sites because they just couldn’t get enough people to look at it.
Use the media to your advantage by utilizing PR tactics to get their attention. Just like any other startup business, PR can play a huge role in finding a place in the industry and being taken seriously. If you can get an industry-related website to cover/promote your crowdfunding, more people will check it out.
Another important part of PR is keeping the attention of current backers and encourage them to promote you too. That means staying in touch, providing regular updates, and providing value to them during and after the crowdfunding process.
Going dark for months at a time is not acceptable. If you keep backers informed, you’ll stay at the top of their mind in a positive way, and might lead to extra promotion or people increasing how much they are paying to back you.
Build a Website
Crowdfunding websites often don’t give very much room for flexibility. You can post some pictures, maybe add a video, and then offer up a couple of paragraphs of text.
If you build and design your own website to work alongside your crowdfunding page, you give yourself much more flexibility. You can have multiple pages of information, detailing what your product is, what impact it can have, and also why people should trust you or your business.
A website can also help build your visibility and provide more credibility. No longer are you just a random person with a crowdfunding page, you’ve taken the time to build a website.
Additionally, you can create a whole content marketing strategy to help funnel visitors towards becoming a backer. Then, if you do reach your goal, you can quickly transform that strategy from backers to customers.
What to do if You Fail
Don’t be surprised if you fail your first time crowdfunding. Failure in business is very common, but how you recover is incredibly important. Just because it didn’t work the first time doesn’t mean give up. Go back to the drawing board, analyze what you did right and wrong, and try again. Maybe you weren’t using the right crowdfunding platform, or you failed to really capture your vision in video and words.
Make a new strategy and try again. If you just do the same plan again, it’s quite likely you’ll fail again. Experiment, find something that works, and then capitalize on it.