Crowdfunding is a great way to earn money for a project, product or personal business venture. Since getting its start, crowdfunding has helped entrepreneurs all over the world get the financial support they need. In 2015 alone, crowdfunding raised $34.4 billion – more than twice as much as was raised in 2014, and the numbers have only continued to rise.
As of this month, Kickstarter has launched over 300,000 campaigns and more than $3 million in donations has been pledged — and that’s just one of multiple crowdfunding platforms!
Projects funded via crowdfunding platforms are also wide-ranging. People have gotten the funding they needed for causes ranging from paying for funeral expenses to school trips or medical expenses. And of course startups have been a primary focus.
But not all of these projects and campaigns do well. Many have failed to raise what they asked for. Even big projects which seemed well-planned and advertised have failed.
Some of the biggest crowdfunding failures? They’ve included the iBackPack — a chic backpack that could have been a data hotspot but suddenly went dark; the Elio Motor Scooter, a three-wheeled electric vehicle, whose release date was indefinitely pushed back; and the Cataldo Medical Care fund, intended to help a woman in Alabama fight “cancer” (she was later convicted of fraud).
If you want your crowdfunding campaign to avoid a similar fate, these 12 keys can help you establish and market your new personal project or business venture.
1. Do your research.
Before you even start your crowdfunding campaign,do your research. This doesn’t mean exploring your product or idea (that should already have been done!): It means researching everything you need to know about crowdfunding, to mine for more success strategies. Not only should you know how to run a successful campaign, you should be aware of all the rules and regulations surrounding this funding source.
2. Choose the right platform.
There are a lot of different crowdfunding platforms out there. While some are general, others are specific to particular industries and niches. Consider your project parameters and do your research to find the platform best suited to what you’re offering. Remember that the right platform will help you connect to your target market and potential investors.
3. Offer more than just an idea.
When you’re ready to start your campaign, have more than just an idea in hand. Some projects don’t involve a physical product; if yours does, have a working prototype you can show off as an example to potential investors. Even the famed Star Citizen video game, which broke crowdfunding records despite not having even been coded yet, had more to show than just the promise of the world’s most anticipated, cutting-edge video game.
4. Know your target audience.
Before you create any marketing materials or post your campaign live, do the research necessary to become familiar with your target audience. Sit down and write out what it is that that audience wants. You can’t just assume you know what that is; you need to do actual research and gather real data to help you become more familiar with those you are targeting.
5. Create marketing materials.
Once you know who your target audience is and what they want, create high-quality print and web marketing materials. You don’t need to copy the videos or fliers of another company — you should personalize materials to yourself and your message. But avoid tacky, cheesy pieces unless they what truly fit with your project.
6. Set goals.
When starting a crowdfunding campaign, set goals. Not only should you decide beforehand what your total fund-raising goal is, you should also specify time line goals, production goals and any other ones needed to keep your project moving forward.
7. Make the reward worthwhile.
While you’re not required to reward your investors, offering something in return for their support makes for a more successful campaign. Make sure that any reward you offer is worthwhile, as well. A hand-written thank-you note is nice, but it won’t likely motivate people to invest.
8. Get personal.
Whether your project is personal or is a new business venture, get personal in your message to investors. When people feel that they know you, they’ll feel more comfortable with, and trust in, your goals. Opening up about yourself and your situation is a great way to help your campaign see more success. Keep in mind that it is possible to overshare, though.
9. Spread the word.
Once you’ve published your crowdfunding campaign, start spreading the word. Share your campaign on social media, with family and friends, on blogs and anywhere else where you can get it out there. The wider your reach, the more potential you have for investors to see it.
10. Communicate openly.
Communicate with your investors throughout the entire process. This also helps to build trust. While you don’t need to tell them every detail, be as open and transparent as possible. Don’t just pitch them or try to sell to them, either; people know when they’re hearing hot air.
11. Accept feedback.
Feedback, although frustrating at times, is extremely important for you to make progress — especially if you’re working on a product. The more feedback you receive, the better you’ll be able to tell where your pain points are and make a plan to improve the final product so it’s ready to go into production.
12. Follow through on your promises.
Don’t forget any of the promises you’ve made during your campaign, whether they were to your entire investor group or certain individuals. If you follow through on your promises, you’ll not only build credibility for any future projects, you’ll also avoid disappointing your investors.
What have you noticed in a crowdfunding campaign that stuck out to you? Do you think it helped that campaign be successful?