Skip to main content

Successful Crowdfunding

From a recent article, 7 Key Elements of a Successful Crowdfunding Campaign. My comments are in bold text below:

1. "Tell your story. As the old adage goes: facts tell, stories sell. When it comes to eliciting customer engagement, a campaign with a good story is an unparalleled strategy. Did you experience some kind of obstacle on your path to entrepreneurship? Did a major life event influence your career choice or business decisions? Tell your story in your crowdfunding pitch to make a connection with backers and encourage engagement.If you don’t have a personal story to share with your audience, share facts and highlights about your startup, product or vision instead. Describe the problem (and severity of the problem) your product will solve, or discuss the vision for your startup. Keep your tone and messaging personal to make backers feel closely connected to you and your project."

Agree wholeheartedly. Telling your story is key

2. "Provide value for value. Crowdfunding campaigns hinge on reciprocity. If your startup offers fantastic products, rewards or opportunities, you’ve created a huge incentive for backers to pledge to your campaign. When choosing your reward tiers, reflect on whether the incentives would appeal to you if you were the consumer; ask friends, family members and business acquaintances for their honest opinions as well."

SOME campaigns hinge on this. Some don't. A key factor is social return: what you are doing for the community. Look at the "Karen the Bus Monitor" campaign on Indiegogo for an example of a purely social campaign.

3. "Introduce scarcity. A basic law of economics dictates that scarce supply inherently creates greater demand. Create greater demand for your startup by limiting one or more of the higher level rewards to just a few — this will inflate demand for those rewards and result in higher pledge amounts for your crowdfunding campaign!"

Don't agree here. This is a holdover from the greed-induced financial crisis.

4. "Create a marketing event. People love to feel like they are part of something bigger than themselves. Try to build a feeling of excitement and rally others around your crowdfunding campaign by tying the launch to a large, well known event. You can connect your product to a holiday, sporting event, or season to increase the momentum surrounding your launch. You can leverage the emotional connection surrounding these events to get people excited about your product and engage them in discussions.This is especially useful for connecting with backers through social channels, capitalizing on trending topics and popular hashtags to get more eyes on your fundraise!"

These seem to work.

5. "Highlight examples of social proof. Going back to the human desire to feel like a part of something bigger than themselves, most people don’t want to be the first or only supporter of a crowdfunding campaign — they want to see other influential advocates joining in. Do you have someone notable as an adviser, backer or endorser of your startup? Share your list of partners and patrons to give confidence to new backers and let them know that they won’t be the only one at your party."

Agree.

6. "Build credibility and legitimacy. Many backers will believe it when they see it. In other words, they require some kind of evidence that your startup is legitimate and picking up steam before deciding to back your crowdfunding campaign. Show your backers what they’ll be supporting in detail — how it works, how you came up with the idea, and even pictures or videos if you have a prototype. Remember that you will likely never meet your backers, so the more proof you can provide that your startup is legitimate the better.
We call this Crowdfunding Authenticity and Validity. 

7. "Interact with your supporters. Don’t leave your backers in the dark for weeks after they’ve supported your project. Interact with your audience through frequent updates, thank-you emails or social media outreach, and responses to their questions and feedback.You can build anticipation and increase engagement in many ways. Post updates counting down to a big surprise regarding your project, conduct a product giveaway, or even host a contest involving your crowdfunding campaign. The opportunities here are endless and can be tailored for your specific startup.When interacting with your backers, always encourage an open dialogue and engagement. In general, people would rather talk than listen. Treat your updates and outreach as a conversation rather than a one-sided message."

Agree. 

Facebook: https://www.facebook.com/CrowdfundingBook and https://www.facebook.com/wmcunningham
Twitter: @CreativeInv
Blackcrowdfunding on Facebook: https://www.facebook.com/pages/Blackcrowdfunding/548423838525216?ref=hl

My new book: The JOBS Act: Crowdfunding for Small Businesses and Startups
http://www.apress.com/9781430247555

Related articles
Enhanced by Zemanta

Comments

  1. I prescribe you set up a shell association and financial balance in the Us crowd funding platform.

    ReplyDelete
  2. Great content, we actually have a blog post specifically written about crowdfunding for women and minority suppliers, definitely check it out here: http://blog.funderhut.com/crowdfunding-makes-bear-y-good-sense-for-women-and-minority-suppliers/

    ReplyDelete

Post a Comment

Popular posts from this blog

Crowdfunding heads to Georgetown

So first Fundrise raises $31Million for real estate crowdfunding.  Now Realty Mogul, a real estate crowdfunding platform, responds quickly with a rare opportunity to be a part of a $31.8 million project in the exclusive Georgetown neighborhood of Washington DC. #crowdfundrealestate Realty Mogul, along with   JOSS Realty Partners ( "JOSS" ) , is introducing the Georgetown Plaza to the crowdfunding world. This 150,097 square foot   Class B office building is  located on Wisconsin Avenue, Washington DC's major north-south artery and half a mile north of Georgetown University's main campus and Georgetown University Hospital. The primary objective of this investment crowdfunding campaign is to acquire, lease-up, and reposition the office building before reselling. In this crowdfunding transaction, Realty Mogul investors will hold a partnership equity stake in Realty Mogul 19, LLC.   Realty Mogul 19, LLC will subsequently invest in 2233 Wisconsin NY Member L

Crowdfunding Accounting 101 - Revenue Recognition in Crowdfunding

A start-up using crowd funding to create a product is different from a normal company. The start-up has cash inflows from donations but does not have a product, yet. In this situation, we recommend using completed-contract method to recognize revenue. Under this way of thinking, we assume the start-up is akin to a project or a long-term contract. The crowdfunding company will find it difficult to estimate the revenue from crowdfunders and, hence, the cost of rewards or perks. Under International Financial Reporting Standards (IFRS) and GAAP guidelines, if the firm cannot reliably measure the outcome of the project, revenue should be recognized based on contract costs. These costs should be expensed when incurred. Profit is recognized only at the completion of the project. In summary, for crowdfunding companies, revenue, expense, and profit are recognized only when the crowdfunded product is actually manufactured. 1 For example, assume that AAA Corp. wants to manufacture bicyc

Why we are so optimistic about crowdfunding for minorities

Dr. Mark Dean - On the IBM team that developed PC : "Mark E. Dean (born March 2, 1957) is an African American inventor and a computer engineer. He led the team that developed the ISA bus, and he led the design team responsible for creating the first one-gigahertz computer processor chip. Dean has also helped in the early development of the computer keyboard. He holds three of IBM's original nine PC patents." Jesse Russell , recognized father of digital cellular technology: "Jesse Eugene Russell (b April 26, 1948) is an African-American inventor and one of the visionaries’ whose innovative perspectives profoundly influenced the wireless communications industry, (a) driver of growth in the 21st century. Trained as an electrical engineer at Tennessee State University and Stanford University , and recognized globally as a thought-leader, technology expert and inventor in the field of wireless communication for over 20 years.." Emmitt McHenry , Founder of Ne