6 Tips for Successful Crowdfunding
In the past 5-6 years, we've heard a lot about “Crowdfunding,” and why not? Based on a 2012 survey conducted by Massolution, the amount of funds raised through Crowdfunding platforms has increased by about 63% over the past 3 years. In 2011 alone, $1.5 billion were raised through Crowdfunding campaigns and more than 1 million campaigns were successfully funded. What is crowdfunding, though? Wikipedia describes crowd funding as: “the collective effort of individuals who network and pool their resources, usually via the Internet, to support efforts initiated by other people or organizations.”
Crowdfunding has re-defined the way people raise money and has become especially relevant in our ever-changing economy. Here are some tips to keep in mind when creating your crowdfunding campaign.
- Think it through. Remember that general projects with larger budgets tend to not receive much funding. Your goal and time frame should be appropriate to the specific project you’re trying to fund. When considering your goal and setting a time frame, think about the time it will take to market the campaign and how much it will cost you to run. Your goal should be reasonable, but remember that you will need to pay for the marketing and perk delivery, so you might want to incorporate those costs into the goal as well. When deciding on an end date, remember that the purpose of crowd funding is to raise funds in a limited amount of time.
- Keep it simple. Avoid running more than one crowd funding at a time. When you’re soliciting donations from individuals, it’s important that you tell them exactly what you need for them to do in order to reach your goal. If you give these donors multiple options for places to donate, you run the risk of not only confusing them, but you also hurt your chances for reaching your set goal.
- Be creative when coming up with incentives for your donors. Offering gifts for your backers is one of the key factors in running a crowd funding campaign. The gifts should be appropriate to your mission and their associated giving levels. For larger gifts, the awards should be extra special.
- Make it attractive. Write a compelling, yet concise project summary. It needs to communicate the need for funding without boring your backers with details. Be sure to also include a short video. The video can contain anything from your project’s content to an appeal directly from your company.
- Keep on trucking. Remember the work does not stop once the campaign is live. After launching your campaign, you’ll need to get the word out about your campaign. The key is to reach a crowd, so use the resources like social media websites, the blogosphere, and your own website to drive traffic to your campaign. Do not be afraid to ask others who support your work to spread the word, as well, and be sure to invite your friends!
- Don’t forget your manners. Be sure to thank all of your backers and try to make the thank yous personal if possible. It’s always a good idea to send a physical thank you card when you send gifts to your larger donors. You might be able to cultivate some long term donors just by being polite!
Crowdfunding is a great way to spark initial interest in your project and will hopefully result in some long-term donors. Be sure to keep your donors updated on your progress and be sure to keep current promotional materials on hand. It can be a lot of work and may not be the right fundraising plan for every organization, but it is a great way to raise seed money and market your work.