Crowdfunding - 10 Things You Need to Know | The Changer

special interest on: transparency, rewards, early.



Crowdfunding - 10 Things You Need to Know | The Changer



Check if crowdfunding is even right for you. Don’t
underestimate the cost of crowdfunding, both in terms of human and
financial resources. You never get money for free. Crowdfunding is a lot
of work and expect to invest considerable time and money into creating a
successful campaign. Also, don’t use crowdfunding as a last resort. If
you’re in a high-risk industry or if you’re running out of cash and
haven’t been able to get investors or people you know to support your
project, don’t try to squeeze your last pennies out of the crowd.




PLAN PLAN PLAN. Over plan, even though you can’t
really plan. It’s hard to know what to expect and difficult to
anticipate what sort of reaction your campaign might get. If you’re one
of the lucky ones and your campaign does go viral, you'll need to be
prepared to handle the press attention, answer phones and respond to
your growing community. That said, plan each day and make sure you have
people dedicated to managing your crowdfunding campaign once it’s live.
Don’t assume the work is over once you’ve kicked off your campaign.




Consider the nitty-gritty. On that note, who’s going
to respond to all the incoming mails and calls? How will you handle
critical questions about your business model or project? In this case
time really is money and you need to be able to manage things
immediately as they come up.




Choose the right platform. Spend time researching
different platforms and choose the one that’s right for you. Are you
doing crowdfunding or crowdinvesting? What is the main user group on the
crowdfunding platform, are they your target group? Does the site
specialize in a certain industry? What are the terms of the site? These
are big questions you need to ask yourself before committing to a
platform. Choose a site that fits your project and the industry you’re
in.




Get legal. Once you’ve decided on the platform, pay
attention to the deal. This is especially critical for crowdinvesting
where you might be liable for paying money back in the future. What are
the terms? What percent does the platform take? When do you get the
money? Don’t let yourself be in for a nasty surprise down the road. Do
your research now and save yourself a lot of pain down the road.




Learn from others. Take time to check out other
successful campaigns and see what worked well for them. Watch their
videos, pay attention to the script and let yourself get inspired. But
also be realistic about what you can achieve with your resources. Adapt
ideas in a way that fits your budget and your target group. And
remember, it’s easier to raise money for an idea that touches a lot of
people. Think about your messaging and how you can make your story
relevant to as many people as possible.




Be annoying. Be prepared to remind people again and
again that they want to support you. Don’t feel bad. It may feel like
you’re spamming but often people forget that they wanted to make a
donation, so keep asking. At least 7 times.




Build trust and transparency. People will give if
they like the product, like you, and believe in the idea behind
it. Being transparent and building trust with the crowd is critical for a
successful campaign. People are less likely to give their money to
something that seems sketchy. How will you spend the money? Who are you?
This relates to the point above on being communicative and engaging
with your community during the campaign. It’s important that you’re open
and present during the campaign so that people trust you and your
project. Here the press can be both a friend and foe. Getting positive
press can boost your credibility and draw attention to what you’ve
already accomplished. On the other hand, the press might jump on your
weak points and can also have a damaging effect on your reputation.




Get early adopters. Get your friends and people you
know to invest right away. Once others see that people are investing,
they're likely to jump on board. (This goes back to the issue of
establishing trust- people will trust a campaign that seems to be doing
well.) Another big point here is that investors are likely to go on the
site early on and judge a campaign based on first performance. If they
see the campaign is performing well, they’ll be more likely to invest
since it gives the impression that this is something the
public/community really wants and is interested in.




Get creative with your rewards. Don't have a fancy
product or big budget for your rewards? Invite “big givers” to a
home-cooked dinner. Offer something one-of-a-kind that fits your mission
or service. Also remember that the rewards can be purchased after you
crowdfund, so though you don’t need this initial capital, you’ll need to
factor that in in terms of what you hope to earn.