Tips For Running a Startup Campaign
Crowdfunding is one of the principal trends for small businesses in 2019.
In essence, crowdfunding is a tactic many startup businesses use to raise the capital necessary for running a business. However, the success behind the concept sounds a little far fetched, since it involves supporters funding the business of their own volition without the traditional investment reward.
That begs the question: Does crowdfunding work for startups?
The short answer is yes, but like everything else with running a business it takes planning and work.
The crowdfunding concept has created a lot of interest from small businesses, not only for the ease of setting it up with today’s technology but also because of the success rate. It is one of the tactics small businesses can now use to get their business off the ground and there are several factors that contribute to that success.
Think of crowdfunding like networking on steroids. Instead of attending events with a limited number people to drum up support for your business, you reach a broader group of potential investors. This often starts within your own social sphere as you share your request with family and friends via social networks.
It’s also more of a grant than a loan, because you don’t have to pay back the funds or worry about interest rates.
Too many people start a crowdfunding campaign without proper preparation. Statistics indicate that more than 200,000 reward-based projects were started last year, which is evidence of its popularity.
However, only about 40 percent of those projects actually received funding.
Still, 30-40 percent is a decent number to go by when considering the benefits of a crowdfunding campaign. The statistics more likely indicate that campaigns are failing because people begin them without the proper knowledge of how to keep them going, rather than indicating that crowdfunding itself doesn’t work.
Successful Crowdfunding Techniques
All in all, crowdfunding can be successful for those who know the proper approach to take with their campaign. The 30-40 percent of businesses who have found success adhere to a variety of tactics for crowdfunding success. Though tactics will vary slightly across the board, most will have a few things in common. Here are some of the techniques successful crowdfunders have used in the past.
Prepare Ahead of Time
Starting a crowdfunding campaign is not as simple as posting your campaign on a crowdfunding website. It takes ample preparation. In general, plan to spend one to two months in preparation for your campaign, in which you hash out every detail you’ll need for success.
Even if this is not your first crowdfunding endeavor, you can always benefit from a boost from professionals, particularly if you’re performing an equity-based campaign. Without proper guidance, you might not recognize when investors are taking advantage of you in the amount of equity they request.
Define an Audience
Successful crowdfunders know exactly who their audiences are and market directly to them. Your audience will be comprised of friends and fans of your projects, and you can branch out to even more backers from there. Without an audience at startup, success will be a difficult achievement.
Have a Revolutionary Idea?
Investors like to see new, fresh ideas that either offer groundbreaking technology, or a considerable advancement of existing technology. Make sure your idea has potential to be worth millions before you start asking for the funding.
Focus on Marketing
Some campaigns will attract flies like honey, but startup crowdfunding is not one of them. It takes a considerable amount of marketing to reach an audience wide enough to gain funding. Successful campaign marketing requires classic marketing techniques, including personal contact, advertising, email marketing, social media promotions, and much more with constant diligence to your cause.
Perfect Your Video
Every crowdfunding campaign should feature a fascinating video explaining your endeavor and why investors should finance your cause. The video is something worth devoting time and money to in order to deliver a high-quality explanation of your cause.
1. Length: Keep it short. 1-2 minutes is standard.
2. Hook: What will get people’s attention in first few seconds?
3. Story: Make sure you have a good narrative.
4. Show Don’t Tell: Use the visual to drive the narrative.
5. Write to Pictures: If you’re saying it, show it.
6. Be Yourself: Be true to who you are…don’t act.
7. Equipment: Your equipment doesn’t matter, just use it well. If you are promoting a high end product your video should reflect that.
8. Brand: Tie your video message back to your brand.
9. Appeal: Make an appeal with a clear Call to Action.
10. Recency Effect: Repeat your message and make sure it’s the first and last thing folks hear.
11. Music: Use it.
Since these are all “dos,” the opposite are clearly “don’ts.” For example, don’t try to act funny if you’re not funny. Be yourself. Having fun and being authentic are the best ways to find crowdfunding success.
Invest the Time
While your campaign is running, expect it to act like a second full-time job. The campaign is not something you can start and then let sit, hoping it will collect money on its own. If you want to be one of the 30-40% of crowdfunders who see success, you’ll invest the time necessary to make it happen.
Finally, backers like to see that they’ll get something out of their payments, particularly if you’re operating a rewards-based campaign. Offer exciting rewards for those who donate, such as a personal thank you call, a tour of the company, a free product, or a fun gift basket. Sometimes the reward can be what clinches the deal for backers.
Crowdfunding success is real for those who plan accordingly. It could be an important step in getting our small business economy up and running, as long as those who begin a campaign have the dedication to see it through.
Good Luck with your Campaign!