More and more businesses are turning to crowdfunding to raise capital to start or grow their ventures. Unfortunately, not all of them do it correctly, leading to disappointing results. Demetrius Bagley, the powerhouse behind one of the most successful veg crowdfunding efforts, shares the key parts to running a winning campaign.
I urge anyone looking at crowdfunding a project or business phase to consider first if their team has the time, energy and focus to commit to it, because a crowdfunding campaign is actually an enormous amount of work (largely writing) on top of everything else going on. It might be better for the business/project to raise monies by selling pre-orders, requesting a loan, soliciting investor monies or other alternatives. Granted, any of these might feel uncomfortable. The reality is they’re quite far from being the all-consuming beast a crowdfunding campaign is. A quality campaign often takes a good many weeks, and even months, to complete.
The great thing about a crowdfunding campaign – particularly one that reaches its goal – is a good number more people will know about your work through the many, many communications shared about it. Those communications include email blasts, one to one emails, posts, tweets, and more. Also quality work achieved on a campaign often improves the overall business/project with more than just money.
Here are what I’ve found to be a successful crowdfunding campaign’s six fundamental parts:
Identify and contact allies
This is the part many people skip over. Your allies are anyone and everyone you know that can and will push a campaign message through their digital channels for you. Crowdfunding is asking for money online after all!
Each of your team needs to go so deep into their address book that there is head scratching over unfamiliar names, recognition you haven’t been in touch with so-and-so for a long, long time, acceptance that an ex-lover might be interested in helping and/or contributing. A key part of this contacts review is removing anyone who is inappropriate for campaign communications while highlighting those highly likely to contribute to and/or publicize the campaign.
This may be the most exhausting campaign piece. Perhaps because it is crucial to success. Gathering the names into a shared spreadsheet can easily take five to 14 days to be used for later communications. A strong allies list will have at least 200 emails, with maybe 75-plus being to relevant brands/businesses that will repost and/or retweet about your campaign because you know them somehow, even lightly.
Many campaigns fund with some 250 people contributing. Yet your team, and allies must contact many multiples of people beyond that. Please recognize this is true for all marketing. Think of all the movies you know about that you don’t want to see!
Create appealing rewards (aka perks)
Make sure some of the rewards are too good to resist! As the value increases from low to high, be sure that sequence makes sense in dollar values. I advise keeping rewards under $40 (or even $100 if you can) to being virtual items, so very little cash is spent on postage.
This can be the hardest part, figuring out what to give for each level, without spend a lot of money. Look at other campaigns for ideas, especially those similar to yours. Note the average crowdfunding contribution is $40 on the low end and $75 on the high end. So the bulk of contributions will be around this range and what a successful campaign will need to deliver on.
Speaking of which, please keep in mind precisely how your campaign’s rewards will deliver. This can be hugely time consuming post-campaign, even when most of the items are digitally delivered e-store coupons, adding names to a web page/social media account and so on.
Asking for assistance to complete fulfillment (effectively, and frugally) can be rewarding and done before launching. Most of us are not warehouse warriors or collating champions, yet you probably know one of these talented people if you ask around. Remember – people do want to help! Otherwise, crowdfunding would not be so successful!!
Decide on a reachable dollar goal
I find this is best achieved by first figuring out how much you need (not want!) to raise by reviewing your project’s expenses. Once that’s settled, add 10 percent to that amount as the platform (for example, Kickstarter, Indiegogo) and credit card processor will be paid roughly that number.
Develop a campaign budget
Make sure your budget includes your project expenses, campaign costs and rewards’ costs. I advise keeping the latter at 15 percent of your goal, as this would mean you have roughly 75 percent to spend on your project after all is said and done.
Write a project pitch
Your project pitch should note why the creator(s) care about this project/business (phase). It’s also a good idea to include a budget summary, relevant images (some of the rewards), and anything else to ‘make your case’ of why this money needs to be received.
Spend care and time, not money, on a sincere video under three minutes
Your crowdfunding campaign needs good audio and video for sure. Special effects can be skipped in most cases. Most campaign page visitors do not watch the video.
The video complements the project pitch section, which is the more business voice of the campaign. The video is more personal, meant to inform viewers why the project and its campaign is important to its project creator(s), speaking directly to the camera. With a video, we can sense your emotion around the project, come care to about its aims, and perhaps choose to contribute to the campaign!
Overall, please know a crowdfunding campaign isn’t easy or hard work. It is a lot of work though. Most of this work can be done pre-launch so you’re not missing opportunities that come up during the live campaign and otherwise staying on track with regular day to day work.
Running a campaign can admittedly be an intense, scary and even fun experience. I wish you much success with yours!