We posted an article with the title "How to Crowdfund" in 2012. Given all that has happened in the interim I thought we would update it. This data is from our Online Class on How to Crowdfund - https://www.udemy.com/how-to-crowdfund/
(Video preview: https://youtu.be/nL5svW7pN7w)
As I noted in 2012, crowdfunding, getting investments and donations from individuals via the internet, has taken off, giving individuals who have, until now, been shut out of funding markets access to much needed cash. It will especially help socially responsible individuals and those seeking to fund socially responsible projects. These are exactly the types of projects that have had an extraordinarily difficult time raising capital in the current economic downturn.
In my book on crowdfunding (The JOBS Act: Crowdfunding for Small Businesses and Startups, published by Apress) I discuss how to raise money online. For those with an interest, let me offer a few updated hints.
1. It is still the case that successful crowdfunding campaigns will bring the first part of the crowd with them. Here’s what I think is going on. Your friends and family don’t have to fund your entire campaign, but they must vouch for you. Your Facebook friends provide social data that validates your identity and your character. It turns out that this social media provided validation is critical to any crowdfunding effort. The bottom line: crowdfunding is about the crowd, and you must have at least the beginnings of one to be successful.
2. Modesty still pays. In 2012, the average, GoFundMe campaign raised $1,126.00. In 2015, 60% of successful Kickstarter campaigns raise between $1,000 and $10,000. It is very unlikely that you are going, like Pebble Watch, to raise $20 million online. You might, but is is unlikely. The bottom line: start small.
3. As the table at left (successful campaigns by category on Kickstarter as of March, 2015) shows, certain types of solicitations work. In 2012, on GoFundMe, Medical, Education and Volunteer projects made up 47% of projects on the site. Different crowdfunding websites have different focal areas and specialties. Do your homework. Review all of the major Crowdfunding websites. Bottom line: make sure you post your project on the right site.
Key Takeaways
A. You have a fan base. It is just not large enough to generate a million dollars in a day.
B. Your fan base may, however, generate $1,000 in a day.
C. If your crowdfunding goal is $1,000, then you are there.
D. For your fan base, you also have something in your possession that will prove to them that you are all in. Think of what this might be and offer it (or a chance to possess it, if only temporarily.)
E. Set a reasonable monetary goal, relative to what you are trying to do.
F. Your entire campaign should be about something people can't get anywhere else, at any price.
G. It should be for something that makes life better for someone else.
Of course, these are just hints. Crowdfunding is complicated. It requires discipline and skill. Again, for more, please sign up to our Online Class on How to Crowdfund - https://www.udemy.com/how-to-crowdfund/
If you think this has been useful, please "like" our Facebook page: http://www.facebook.com/CrowdfundingBook
(Video preview: https://youtu.be/nL5svW7pN7w)
In my book on crowdfunding (The JOBS Act: Crowdfunding for Small Businesses and Startups, published by Apress) I discuss how to raise money online. For those with an interest, let me offer a few updated hints.
1. It is still the case that successful crowdfunding campaigns will bring the first part of the crowd with them. Here’s what I think is going on. Your friends and family don’t have to fund your entire campaign, but they must vouch for you. Your Facebook friends provide social data that validates your identity and your character. It turns out that this social media provided validation is critical to any crowdfunding effort. The bottom line: crowdfunding is about the crowd, and you must have at least the beginnings of one to be successful.2. Modesty still pays. In 2012, the average, GoFundMe campaign raised $1,126.00. In 2015, 60% of successful Kickstarter campaigns raise between $1,000 and $10,000. It is very unlikely that you are going, like Pebble Watch, to raise $20 million online. You might, but is is unlikely. The bottom line: start small.
Key Takeaways
A. You have a fan base. It is just not large enough to generate a million dollars in a day.
B. Your fan base may, however, generate $1,000 in a day.
C. If your crowdfunding goal is $1,000, then you are there.
D. For your fan base, you also have something in your possession that will prove to them that you are all in. Think of what this might be and offer it (or a chance to possess it, if only temporarily.)
E. Set a reasonable monetary goal, relative to what you are trying to do.
F. Your entire campaign should be about something people can't get anywhere else, at any price.
G. It should be for something that makes life better for someone else.
Of course, these are just hints. Crowdfunding is complicated. It requires discipline and skill. Again, for more, please sign up to our Online Class on How to Crowdfund - https://www.udemy.com/how-to-crowdfund/
If you think this has been useful, please "like" our Facebook page: http://www.facebook.com/CrowdfundingBook
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