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Working the crowd. How to make the most of crowdfunding
by Startacus Admin
In case you’ve forgotten crowdfunding is a process by which money can be raised in support of your business through a growing number of social networks which facilitate contributions from the internet. You 'pitch' your business idea on one of these platforms for a designated period of time with a pre-agreed target to be raised - in most cases if you don't raise all of the money, you don’t get any. The lovely people who donate in support of your business will sometimes get a small stake in it or the promise of discounted goods or services.
So there is a massive opportunity to raise that all-important investment capital that is so hard to come by these days, but how do you make sure that your pitch does the best possible job at selling your idea?
Before you begin your Campaign:
Make sure that your business is at the stage where it is ready for the crowdfunding model. There is no point in wasting the opportunity by pitching a half baked product or idea, it's unlikely people will respond to it well and it may be damaging to your reputation. It may only take a few months for some campaigns to raise all the money they need, but you can be sure they've been years in the making.
Research Research Research and then research some more. There are over 500 crowdfunding platforms out there, so the choice is enormous - shop around and make sure that you pick one that matches well with what your product/service is all about.
Have a realistic view of how much money you need to raise and how much you are likely to raise - if you set the bar too high then you might have to do the walk of shame and leave with nothing!
When shopping around for a funding platform, remember to delve into the small print of the agreement paying careful attention to what the funding fees will be, what the time frame for funding is, what rewards should be given to donors and if there are any penalties for failing to reach your target.
During your research, view as many successful crowdfunding pitches as possible taking inspiration from them where you can. You should also look at some pitches which aren’t doing so well, these can give you some pointers on what to avoid (normally Startacus wouldn’t advocate capitalising on the misery of others, but in this case you should capitalise ‘till your hearts content!)
Make sure that you are already making effective use of as many relevant social media sites as possible, this will give you an immediate network of interested parties with whom you can share/tweet about your campaign.
The Campaign itself:
Remember this isn’t Dragons Den and likewise your pitch shouldn’t be sterile, dry, dull or corporate - your campaign will be viewed by people who (for the most part) are regular, everyday folks and not venture capitalists or investment bankers. Whilst having an excellent product or service is of the utmost importance it’s equally essential to remember that people invest in people so your pitch should be light, impassioned, straightforward and above all demonstrate your confidence in the business and its potential to be a runaway success.
Most crowdfunding platforms will allow you to create a campaign home page which is accessed via a listed image and introductory paragraph. Your homepage will contain two key elements; a written summary of your service/product and a video to support and elaborate further. When addressing each of these features it is important to remember that they should work in unison with one another i.e. your introduction should make people visit your homepage, your homepage should make them watch your video and your video should make them want to donate.
Your intro should immediately grab the attention of everyone who sees it. Use a colourful attractive image, a bold headline and a succinct statement of the pivotal selling point of your product/service.