April 24th, 2017
How to make your startup’s crowdfunding campaign a hit
The Financial Post | Melissa Leong | Sept 2, 2014
With millions of dollars available through infinite contributors, crowdfunding sites have revolutionized the way small businesses get up and running. However with increasing competition, creating a campaign that will stand out from the rest of the noise has never been more challenging.
“There’s no banker there. There’s no angel or [venture capital],” Ruth Hedges, a U.S.-based crowdfunding industry leader and chief executive of Crowdfunding Roadmap, says. “It’s you and your self-determination and I say go for it. Do the hard work. Build the social capital. Create the material.”
Kickstarter has channeled more than US$815-million from 4.9 million backers to nearly 50,000 projects since 2009, a 2013 World Bank report said. The same report estimates that households in the developing world could provide up to $96-billion a year in crowdfunding investments by 2025.
That’s a lot of money that could be at your disposal. But crowdfunding isn’t a well of money. A lot of people don’t raise as much as they hope to.
“Historically, 80% of crowdfunding dollars came from one friend away from you,” Ms. Hedges says. “There’s a small percentage of crowdfunding campaigns over $100,000. The majority of people who crowdfund raise less than $5,000.”
So what can entrepreneurs do to ensure crowdfunding success?
Study campaigns similar to yours Ms. Hedges suggests asking yourself “What do you like about them? What draws you in?”
“There was a campaign called the 10-year hoodie,” she said. “They let you pick the colour of the sweatshirt. They showed you the stitching. They showed you the zipper. There were lots visuals, lots of details, things that people can relate to.”
That Kickstarter campaign set out to raise $50,000 last year. It raised a $1-million more than its target. “It’s just a sweatshirt and you think, ‘How could they do that?’”
Visuals are key “Almost everybody fails without a video. It’s a visual connection to the people putting on the campaign or the product,” Ms. Hedges said.
It doesn’t have to be shot by Steven Spielberg. Just find a compelling way to sell your campaign and ask for the money. And make it about being part of a community. “You have to keep referencing back to your audience: ‘It’s in your hands now. Let’s all do this together.’”
Also, include lots of graphics and pictures, especially of you and your team. “People like to know there is someone behind the campaign,” Elizabeth George, marketing and business development officer for B.C.-based FundRazr noted. “Even a simple switch from a stock photo or a generic photo to one of yourself and your children or anybody that reflects your story is going to get you more donations.”
Have a team of four or more That increases your chances of success by 70%, Ms. Hedges said. “It’s an intensive 30 days. It’s not something one person can do.”
Have the first 30% of your goal committed before going live “If you can’t convince your grandparents, your aunts and uncles, how can you convince complete strangers? The bigger crowdfunding gets, the more competition there is out there,”Ms. Hedges said.
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada crowdfunding hub providing education, advocacy and networking opportunities in the rapidly evolving crowdfunding industry. NCFA Canada is a community-based, membership-driven entity that was formed at the grass roots level to fill a national need in the market place. Join our growing network of industry stakeholders, fundraisers and investors. Increase your organization’s profile and gain access to a dynamic group of industry front runners. Learn more About Us | About Crowdfunding or contact us at firstname.lastname@example.org.