Crowdfunding has enjoyed plenty of mainstream exposure thanks to high profile success stories like the Pebble Smartwatch which raised $20 million in just a few weeks. Unfortunately, this has also cultivated a perception amongst some entrepreneurs that it is a quick and easy source of capital. In reality, it’s not as simple as just sharing an awesome idea and then laughing all the way to the bank.
Crowdfunding blockbusters are extreme outliers. Most projects do not raise millions. In fact, less than a third achieve their funding targets.
So what separates the success stories from the scrapheap of failure? We’ll be covering this in more depth during our webinar next week, but here are three keys:
#1 – Build your audience
You should have two things in place before you launch a crowdfunding campaign: an exciting project (that you want to fund) and an audience (that can generate some initial momentum). Most entrepreneurs focus far too much on the former and completely neglect the latter.
Building an audience is crucial for several reasons. Firstly, and most obviously, they are more likely to fund your venture than complete strangers. Beyond this, they can provide invaluable word of mouth (incorporating a social media campaign is a great way to leverage this potential) as well as much needed credibility (people are much more likely to back a project that other people are funding and raving about).
#2 – Highlight credibility
As fantastic as your project may sound in theory, you need to convince people that you can actually pull it off. Don’t just emphasise your product or idea, give plenty of attention to your credibility as well.
Leveraging your audience is a great way to build trust, but it’s not the only tactic. For example, you can showcase other successful projects that you have worked on, provide a detailed post-funding plan of action, and use high quality videos and images to tell your story and present your idea.
#3 – Engage your backers
A meeting with your bank manager might last an hour. A crowdfunding campaign, by contrast, can run for weeks. That’s a vast difference in how much time you have to engage with investors.
This extended period of engagement is an oft-overlooked opportunity. Crowdfunding, by definition, is a social experience. People want to feel like they are part of something big and exciting. You can set and sustain that tone by posting updates, initiating conversations, answering questions, and sharing fresh content.