As you enter the world of business and entrepreneurship with our very own startup, the first and largest roadblock you will run into is funding. Usually, we look for potential investors from either people we know or from those looking to support you through a corporation or with money out of their savings. Although these ways can get you all the help you need, we also live in an age where we can gain funding from strangers through modern technology. This is where crowdfunding comes in.
On paper, crowdfunding may seem like the best way to go if you're looking for financial support with the business you're working on. However, the reality of it all is that without careful planning and strategizing, your startup might end up getting stopped before it even gets anywhere. It’s important to consider the risks before jumping right in.
You have to make sure you’re well-prepared to face these when taking on crowdfunding as a source of money for your startup.
It's essential to recognize crowdfunding as a legitimate alternative when trying to get your startup off the ground. Doing so will open you to more options and may give you the boost you need to make it out there.
Here are 14 ways to help you establish and vend your crowdfunding campaign.
1. Choose the right platform that benefits you the most
It's crucial to figure out precisely what you want and how you're going to get it. Due diligence and research are critical to this endeavour. After market research, knowing more about the platforms you can use to start your campaign is the next big step.
Please take note of crowdfunding models each platform offers and take your time to understand it. There are at least three well-known platforms you can familiarize yourself with: reward-based crowdfunding, equity-based crowdfunding, and donation-based crowdfunding.
Learn more about each platform's other aspects, such as the fees they charge, what kind of support they provide, and other benefits they can offer. Research crowdfunding platforms that specialize in a particular sector. If they align with your startup, you could potentially garner more support from people who are looking to invest.
2. Offer more than just an idea
Most people would want to know more about where they're putting their money into, so try to strategize and provide something more concrete when it comes to your product and goal. This is where reward-based crowdfunding can be at its strongest.
Reward-based crowdfunding gives consumers a better idea of the process you're going through and incentivizes them to provide more support in exchange for a better product down the line. It gives them a clearer idea of the goal and your product's potential in the future. This potential could be what they need to see as they help you attain each small goal you've set for yourself.
3. Pinpoint your target audience
The next step you could take would be to define your target audience. Look into each factor, such as gender, age, and interests. Do some research on how you can attract the kind of people you'd want to purchase your product or service.
Even though you usually would have a clear idea of what kind of customers you're looking for, conducting surveys could help you narrow things down and optimize your startup. Try to ask about problems and see if it's something you can solve with what you have. Gather relevant information and see if you can give those you asked something that could alleviate their problem.
4. Create your marketing materials
Once you have those abstract ideas sorted out, you can now proceed to formulating a marketing strategy and finding the tools you'll need for it. Utilize different tools and other internet platforms to advertise your crowdfunding project. This includes setting up your crowdfunding page and keeping it updated.
5. Strategic social media
Social media websites are a great platform to use when informing many people about your project. For instance, setting up a virtual event on Facebook can notify your investors of the launch of your campaign. You can also use the website as another platform to keep them up to date with the latest updates relating to your project. Due to the amount of traffic these websites have and the frequency of use, you'll be able to advertise your campaign effectively.
6. Gain social proof for your project
The next challenge you could face in crowdfunding is getting yourself known outside of social media. This is where journalism and news can be utilized. Although it is a bigger and somewhat riskier step, the potential payoff could help you get more exposure and thus more financial support from different people in different fields.
Another way to broaden your customer base is by providing social proof. This can come in the form of testimonials from friends or clients that you've given service to. This kind of social evidence can help in convincing the quality of your product to other potential investors.
7. Tell a Compelling Story
Please do your best to be as appealing as possible when it comes to your startup. Investors are always out to make a difference even in the crowd. Talking about what you're set to do and accomplish and how you're going to do can give an idea, but being creative and elaborating on how you'll achieve your goal might be what it will take for crowdfunders support you. It'll convince them to stick with you and see your plan through to the end.
8. Use Photos and Video for Emotional Impact
Showing visual proof and representation is just as important. Consider investing in creative talents that could help you promote your product or service better. Trying to appeal to potential clients on the internet means trying to catch their attention. Doing your best in making your startup stand out will get you far.
9. Keep a tight timeframe.
A potential struggle you may have in crowdfunding is scheduling and how much time you have to accomplish your goals. Once you get others involved in your endeavour, expectations now need to be met. Thankfully, you can set the time frame you need to achieve the goals you set for yourself.
Regardless, make sure you keep to it. Investors will expect timely updates on your progress. Keep to your schedule and if you are expecting delays or inconveniences, let them know and discuss how you'll be making it up to them for the time being lost. Only make promises you can feasibly keep.
10. Build Trust Communicate openly.
Not too unrelated from the previous point, open communication builds trust and credibility to you and your startup. By maintaining this, you'll be able to not only keep the crowd's support but may even open new avenues to expansive marketing. Word of mouth spreads quickly, and if your supporters provide good reviews to others, it might interest them in checking you out and give their kind of support. Positive reviews are one of the best results of having open communication.
11. Accept feedback.
In that vein, never turn away feedback from your fanbase. It can serve as a kind of beta test. If you receive feedback openly and eagerly, you'll be able to spot flaws you would have missed. It'll also open you up to optimization and allow you to provide a better product once you officially release it.
12. Do Email Follow-up with Your Donors
As you keep your investors and crowdfunders updated, be sure to send out emails that include updates, future plans, and a general idea of where their money is going. Please keep them in the loop and provide some details on the direction your startup is going. Even though not all investors may appreciate this, the gesture of transparency will go a long way, and it'll only build upon the trust you're looking to secure.
13. Get Creative with Your Promotion
The overall promotion of your crowdfunding campaign needs to appeal to as many people as possible. With this in mind, try to find ideas on how you'll expand and promote yourself. Take inspirations from videos or other successful campaigns and see how they did it.
People that recognize the creativity you've expressed will usually want to know more about what you're trying to provide. It'll stand out more and you could even build a recognizable brand out of it. Although it could be challenging, the payoff is definitely worth it.
14. Think about your total investment goal
It's vital that you always keep the finish line in mind. Not only that but also consider where you'll go once you get there. As you get closer to having the funding you need to successfully launch your startup, be sure to remain consistent in what you're aiming for. Many disappointment stories stem from having a successful crowdfunding campaign only to fall flat once the goal was achieved.
Always think about your budget and where the money you'll get is going to go. A surplus of wealth should not mean that you become complacent with other people's money. Continue to plan and take time to finance everything adequately.
With all these things considered, you'll be able to get ahead of other startups and potentially pull off something that could change the market. Crowdfunding may seem like a risky prospect, as there are agreements where failure could mean the end of your startup. But at the same time, the success you could have could come to you overnight, allowing you to attain success probably more quickly than when you started. With careful and diligent research, you'll be able to get a better grasp on what you need to do to have a successful startup campaign.