Crowdfunding has created a permanent shift in the financing landscape. Nonprofits, businesses, Entrepreneurs, and
potato salad enthusiasts individuals are using this new channel to tap into a mass of investors to fund their ideas. Crowdfunding should be especially appealing for nonprofits, as it allows hundreds or even thousands of supporters to vote with their wallets and bring worthwhile projects or causes to life.
Things like kickstarter might seem scary, but they can also be a new way to fund your social enterprise projects without having to chase grants or worry about incurring debt.
If you’ve been thinking about crowdfunding, then here are 10 To Dos to cross off your checklist before you launch.
1. Have a clear understanding of your idea
Just because you can raise funds, doesn’t mean that you should. You should have a clear project or initiative that adds value. People who support crowdfunding campaigns don’t want to just throw away money, they want to back a winner. Make sure that your idea is clearly defined so that you can execute successfully once you are funded, and deliver tangible results.
2. Create a strong pitch
When selling anything, to anyone, we know that a strong pitch is needed (if you need a refresher as to why, click here). The message needs to be loud and clear. How many great causes/projects/stuff don’t get funded because people don’t understand what they are being offered? Your backers should understand the great thing that they can become a part of.
3. Know Your Costs
Many kickstarters have received a bad name because they have brought in hundreds of thousands or even millions of dollars and still fail to execute. Everything from poor planning to outright fraud has turned many off from backing campaigns. For these reasons, be sure to know exactly what your costs are, do firm research upfront, account for shipping and all fees, and please, please, please add in a contingency of at least 10%.
4. Talk to successful project owners
Now that you have a clear idea, a pitch, and know what your costs are, you are ready to start getting serious about your first crowdfunding campaign. This would be a great time to comb through the top crowdfunding sites (think kickstarter, indiegogo, and perhaps Rockethub) and contact anyone who has had a similar project that has been successful. When I ran my campaign, I was blown away by the helpful feedback that others were willing to provide. Crowdfunding is very much about Blue Oceans and collaboration, so don’t be afraid to ask for help.
5. Find out where your friends are
During this process you should probably create accounts on all the major platforms to understand how they work, and most importantly, see if any of your friends are on them. Be sure to connect your facebook account (if you are one of those people that is too cool/paranoid for facebook, you will need to stop reading this and create an account now so that you can promote your project later), and see which of your friends has accounts. If you already know a lot of people on a given platform, then this would help you with the next step…
6. Select your platform
Kickstarter or Indiegogo? This is probably one of the most difficult choices you will make, so don’t be discouraged if this takes days. Do your research, CONTACT your prospective platforms, read (a lot) and make sure that you pick the platform that overall is a best fit. Understand fees, how they feature content, and how friendly they are to your type of project. Look at what is currently featured and doing well to gain an understanding of which platforms is for you.
7. Select your perks
This part can be as tricky as the step above. What will you offer backers, and how much do you think they will be willing to pay? As a hint, consider having a $1 digital reward, because not only do you get a whole dollar, you also get an additional backer who can share with others. Also, don’t forget potential retail partners; during my campaign 4 backers accounted for nearly 60% of my goal, because they bought 10 and 20 packs of our graphic novel. The main thing is to make sure that big backers are well rewarded; they need to feel that they are getting something very cool and very unique. Our biggest backer received a portrait done by one of our comic book artists and absolutely loved it, so be creative here.
8. Reach out to influencers
Now that you’ve planned out a solid campaign, you need to reach out to the people that will help you get the word out. Reach out to bloggers, media outlets, and research those that have supported similar projects. Don’t be afraid to aim high and contact larger outlets. Sure, you might not make it to the front page of Mashable – but it’s certainly worth a try. When we launched our campaign, we were initially hestitant to reach out to the big sites, and actually made it onto Bleeding Cool – arguably the leading comic book industry website. Be sure to sell your influencers on your story, and try to connect with them and their readership – this is a lot more than just marketing, and will be very important in building early success and a strong start to your launch.
9. Reach out to your supporters and fans
OK, now that you’ve built a campaign and reached out to those that will help you get the word out, you are nearly ready to go. This step might sound obvious, but don’t take it for granted. I have seen amazing projects fail because of a lack of letting fans know. There is one project that I seriously considered funding entirely, because even though it was awesome it had 0 backers and was almost over. Get onto social media, tap into your newsletter list, and make sure that your friends and family (this is where facebook comes in) know what you are up to and how important this project is to you both personally and professionally. Everyone you know should know that you are running a crowdfunding campaign.
10. Plan for success (and failure)
Now that all the pieces are in place, before you launch go back and review all of your previous points. Make sure that your costs are still accurate, and if you have received any early feedback now would be a great time to review your perks. Make sure that you can still deliver on your project, on time and within budget. If everything still lines up, then get ready for launch, and plan for the best possible outcome, but also consider what would happen to your project if you don’t meet your goal. Not meeting a crowdfunding goal isn’t the end of the world, but you should have a contingency in place.
Does crowdfunding still sound overwhelming? Give us your thoughts below!