Seven tips on how to run a successful crowdfunding campaign
With the growing popularity of crowdfunding as a way of raising business finance, it is important to consider how to make your campaign stand out from others. Here are some tips for a successful crowdfunding campaign.
1. Think about your total investment goal
When setting your investment goal try to make it as low as possible. Calculate how much money you need to cover your campaign goal and any extra expenses, including the fee that the platform takes. Do not look at crowdfunding as a way to make profit at this stage. A target of £800 that is exceeded is much better than a target of £5,000 which is unsuccessful.
2. Market your crowdfunding campaign
Marketing your crowdfunding campaign is central to its success. Crowdfunding platforms will host your project but it is your responsibility to promote your campaign before it starts. Set aside time before your campaign launch to use social media, press, networking, exhibitions, local radio and promotional materials to create a buzz around your project. Aim to have a number of interested investors ready to back your project on day one of your campaign.
It is also very important to plan promotion of your crowdfunding campaign during the campaign as you may experience a lull after the initial launch.
3. Gain social proof for your project
Talk to your friends and family about your project - are they willing to invest in your project? If the answer is no, it is unlikely that investors with visibility of thousands of competitive projects would want to back you. Ask your family and friends for feedback and learn from it.
If your family and friends are interested in investing, this can be a great sign that you have a good idea - make sure that all these people are ready to start funding your project on the first day of the crowdfunding campaign. This will help to create a buzz around your project and can encourage other potential backers to invest.
4. Research similar projects for inspiration and tips
Some crowdfunding platforms do not take down campaigns once they have finished (whether successful or unsuccessful), this is a great opportunity to research similar projects to your own and see what works well and what doesn't.
5. Create a video that captures your audience and promotes your project clearly
Set aside a video budget to make sure that it is interesting and clearly presents the benefits of your project. When planning the content, create a video that can be used for future marketing opportunities to get the most for your money.
6. Communicate effectively and honestly with all your backers and potential backers
Make sure you communicate clearly about what your project is, what it is trying to achieve, how much money is needed to make it a reality and what you will deliver and when. Answer all questions that are directed at you. When possible answer the questions publically but in some cases you may prefer to reply privately.
When you do have backers, make sure that you keep them up to date with your product and always let them know if you do not think you will make a deadline you had previously set.
7. Be creative if you are offering rewards
If you decide to go for reward crowdfunding, let your potential backers know what's in it for them and make your rewards interesting if you can. One option is to offer different rewards for different levels of investment - this can encourage a potential backer to add more to their investment.