Money. Just the one thing holding us back from fulfilling our dreams and launching our ambitious projects. Or is it?
In the past, starting a business would require months of trawling the investor circuits and pitching over and over again until your voice was hoarse from blowing your own trumpet.
Now though, thanks to the democratising power of the internet, there’s another way of raising funds for your start-up and it involves reaching out directly to your future customer base. Why put all your energies into trying to persuade an investor that there’s a market for your product or services, when you can reach out to the market itself and (literally) get their buy-in from the start?
With crowdfunding, you tell your story and explain why you’re looking for funds and what you’re offering in return. To help you reach your target, people from your network and beyond can back your project by selecting from a range of options with different incentives offered for each. These might be pre-orders of your product at a reduced rate, invitations to a VIP launch event, or even an intimate dinner-for-two with the founder!
The benefits are not just financial. Executed well, the crowdfunding campaign can create a buzz around your project and start building a community before you’ve even launched.
So now there’s no excuse not to launch that business you’ve always dreamed of. But how to make sure your crowdfunding campaign is a success? Here are our top tips:
- Make sure you tell an engaging story. Campaigns using a video are much more likely to be successful than those that don’t (50% as opposed to 30% according to Kickstarter)
- Budget carefully and be clear what you’ll be spending the money on, with tangible milestones for different levels of funding.
- Be creative with the incentives you offer with a variety of options to appeal to potential backers with different interests in your project and varying levels of engagement. This campaign for a new HUB in Oakland (the most successful crowdfunding campaign ever for a coworking space) gives a long list of options, from having a photo on their community wall to getting life-time membership of the space once it opens.
- Choose the right platform. There are many out there and they are becoming ever more niche. For example, Buzzbnk specialises in social enterprises, while Petridish exclusively funds scientific research.
- Start the snowball effect by getting your close supporters, family and friends to sign up and invest before pushing out to your wider network. Then give it a big marketing push through all your channels and make sure to keep the updates coming to sustain interest.
Nobody’s going to claim that crowdfunding is an easy ride. It requires ingenuity, persistence and highly-developed insight into your unique offering… but if you get it right, the rewards are great and you’ll have given your start-up momentum from the get-go.