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SuperGeek James Kerr @SXSW: Advice on crowdfunding from Indiegogo founder Rubin

share save 171 16 - SuperGeek James Kerr @SXSW: Advice on crowdfunding from Indiegogo founder Rubin

Pacific Business News  |  PBN Contributor    |  Mar 11, 2013, 3:14pm HST

Indiegogo sxsw slava rubin - SuperGeek James Kerr @SXSW: Advice on crowdfunding from Indiegogo founder Rubin

 I attended an interesting presentation at SXSW Interactive by Slava Rubin, CEO and cofounder of Indiegogo, a popular crowd-funding campaign. He basically hammered the point that crowd funding is not some kind of lottery.

Instead, through careful planning and deliberate effort, Indiegogo can serve as a platform for anyone, anywhere, to raise money for any idea.

Here’s his advice:

• There’s no right time to start a business. Just get started. Many very successful companies started during recession.

• You don’t need a lot of money to get started. Many large corporations started on just $10,000.

• Business plans are just thoughts and opinions. Don’t waste too much time making one. Instead, just go do it. Go get five customers and prove people want what you’re offering.

• Your startup’s values and culture matter a lot. Your team needs something to live and breathe.

• Marketing and PR are important. But focus your time and money on being product-obsessed. Then focus on being happiness-obsessed. Marketing and PR come later.

• Most winning business ideas are not new ideas. Instead, they are altered or repackaged ideas of old ones.

• Don’t worry about market size. Worry instead on penetration. One hundred percent of Luxembourg is better than zero percent of China, Push forward in your passion.

• It’s not obvious when you have something good. Is the wind in your face or behind your back? If the wind is on your back, keep going.

• Your core funding pitch must be personal and engaging. Video works well and brings in 114 percent more funding than no video. Don’t sell or brag. Keep the video to 2.5 minutes or less.

• Set attainable funding goals. Size of goal can negatively affect investors. You are four times more likely to hit your goal once you have achieved 10 percent of it. The money velocity will continue beyond the goal. Example: Bob sets goal of $10,000 and raises $7,000. Jenny sets goal of only $4,000 and raises $7,000. Both raised the same amount, but Jenny is still getting funding even though she is 100 percent funded. Investors want to fund “winners”. In this case, Jenny looks like a winner. Bob does not.

• Studies show you will need 20-30 percent of funding from family and friends before strangers will jump in.

• Your perks [that’s what investors receive] should be unique. The sweet spot is three- to eight perks. Don’t go over or under. Have one fun and silly perk, like a free trip to Hawaii for a $20,000 investment or more. That will help generate press. Most popular amount for perks is $25. Remember, you must fulfill the perks. Digital perks are great [because they are cheap and easy to fulfill, like a shout out on Facebook].

• Frequent, proactive communication helps. Do an update every five days or less. You will see four times more money than updates 20 days or more.

• On average, campaigns hit their target on day 36 of a 47-day campaign. You should keep a campaign open if it’s doing well. Everyone wants to be part of something active and engaging.

• Campaigns run by teams will raise 80 percent more than campaigns run by solo individuals. People like seeing people they can trust.

• Eighty-five percent of campaigns that hit their target will get first contribution on day one. Conclusion: You must do your homework before launch.

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share save 171 16 - SuperGeek James Kerr @SXSW: Advice on crowdfunding from Indiegogo founder Rubin

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