The popularity of crowdfunding has skyrocketed over the past decade. Right now it has become the hottest trend in the start-up ecosystem. And why not! According to Statista, an approx. USD 6923m transaction happened in the crowdfunding segment and it is expected to grow annually by around 14%. No wonder then that entrepreneurs are in a hurry to find the secret tips for successful crowdfunding campaign in 2020.
Those who don’t yet know about crowdfunding it is a fast emerging trend followed by young entrepreneurs to quickly raise money online.
Some startups offer perks, such as a sample, or an early access to the company service. The ulterior motive is to entice people into making small contributions that help fund the project. These small donations turn into a huge start-up capital if the business idea appeals to a large group of investors.
Armed with the right tips for successful crowdfunding campaign, online ventures like Pebble E-Paper Watch, Ouya, or Bitvore raised millions to take their dream projects forward.
But before I talk about the effective tips for successful crowdfunding campaign, let’s do some fact check.
What You Should Know About Crowdfunding Platforms Before Applying The Tips for Successful Crowdfunding Campaign
Generally, every crowdfunding website caters to a particular niche. Thus it is important for entrepreneurs to research the platforms to determine which website best matches their particular project requirement.
Few other factors to consider before selecting a platform are the funding model, the fee structure, as well as the terms and conditions.
Which are The Fast Emerging Crowdfunding Sites 2020?
Besides the names I mentioned above, you should be aware of these fast growing crowdfunding platforms which are expected to outperform the biggies in 2020.
Causes – as the name signifies, it focuses more on projects which highlight social and political issues.
Patreon – is stealing the limelight recently because it provides a great platform to digital creators. So if you are a blogger/vlogger/podcaster, you can use patreon to reach out to your fan base and appeal for donation.
CircleUp – is best for those interested in raising money to build a consumer brand. It allows both equity and credit financing options.
LendingClub – adopts a flexible approach in providing personal and business loans. They follow the debt crowdfunding model.
The million dollar question is, how do you engage the masses to fund your project? Here I discuss some powerful tips for successful crowdfunding campaign, to follow in 2020.
Prepare A Stellar Pitch – One of The Necessary Tips for Successful Crowdfunding Campaign
The pitch should be concise, authentic, and carefully delivered to the target audience. It should detail the idea of the business with absolute clarity. The digital pitch also need to include the rewards that you are promising to your investors and supporters.
Be it an early access to a product or service, a sample, or an entitlement to vote for a product design, the benefits that you are offering should be clearly mentioned in the pitch.
The better the rewards, more attractive gets the pitch- this is the thumb rule that you should follow while pitching to the audience. Please remember, the pitch can make or break your crowdfunding campaign. So take some time to draft it in a way that attracts more number of people.
Shoot A Stunning Video – One of the Not-to-Miss Tips for Successful Crowdfunding Campaign
A video is like a window which provides a sneak peek into your business dream and goal. Without doubt a nicely shot video allures them into making a contribution! Hence, a superior-quality video is one of the necessities to plan a crowdfunding campaign in 2020.
This article offers some interesting information about how to plan a successful crowdfunding video.
Use Your Networking Skills to Start A Crowdfunding Campaign For An Online Business in 2020
Networking is crucial for any business to succeed, more so, when it is a start-up. The networking process, in crowdfunding, begins before the start of the campaign, and it never ends.
Always look out for influential people you can connect with, both online and offline, to give your crowdfunding campaign a favorable outcome.
The primary objective should be to make people aware of your crowdfunding campaign before it actually hits the ground.
Here are few networking tips which you can follow for your crowdfunding campaign as well.
Approach Your Loved Ones
Reach out to your close friends and family with a blueprint of your business model, and tell them what you are up to. Explain them in details how the crowdfunding process works, and how they can make a donation. Tell them that their donation is important to you, no matter how small the amount is.
Don’t be shy to approach your loved ones!
You will be amazed to know that nearly thirty-percent of crowdfunding projects of major start-up firms have been funded by their close friends and family.
With the support of your loved ones, it becomes much easier to start a crowdfunding campaign smoothly.
Tap Into The Vast Digital World To Start A Successful Crowdfunding Campaign in 2020
Numerous surveys and studies reveal that more than fifty percent of the global population obtains information from various digital channels.
Social media is indispensable in this era. Thus it is needless to say, digital marketing can play a vital role in promoting your crowdfunding campaign.
Platforms like Twitter, Facebook, LinkedIn, Instagram, and others are a huge hit in business circles since these social media channels allow brands to directly connect to an exceptionally broad range of audience.
A rock-solid social fan following can definitely help market your crowdfunding campaign across the length and breadth of the globe.
The best part is that, your followers literally act as the brand advocate for your start-up firm when they start sharing your posts.
And, if your business idea is indeed unique, people will lap up the idea and make it viral in minutes! Yet digital marketing is not an easy game. It involves high-level strategies to reach the target audience.
It has been observed that digital marketing endeavors of small businesses often fail because they stop producing valuable content on a regular basis.
If you are not sure how to do it on your own, hire a professional digital marketing agency to take your crowdfunding campaign to the next level.
Nurture Leads and Make Them Feel Special!
Establish a steady channel of communication with your potential backers. Make them realize that you are extremely passionate about your startup business. Share stories with your supporters.
Reveal details about why you want to launch the start-up, where the idea came from, your background, and crowdfunding goals.
If your story and vision exhibit passion and confidence, then, chances are, investors will finance your business without hesitation.
Don’t Forget Promises You Make to Your Investors
It has now become quite easy to start a crowdfunding campaign for a small online business anytime you want. But it’s not so easy to build up a trustworthy relationship with your followers, and supports.
Try doing that by delivering the perks as promised. Also, ask for reviews and feedback from your backers, after they receive the products or services.
While feedback will assist you to design better products, positive reviews will boost the credibility of your company. You can show this proof of credibility to the venture capitalists when you approach them for second phase funding of your internet business.
Few Additional Tips to Ensure Your Crowdfunding Campaign Remains a Success!
Don’t just jump into crowdfunding because you believe it is the easiest route to raise money. Do a detailed market research to find out if your product/ service is indeed unique and useful enough to appeal to investors. If you are offering something which is too similar to existing products/services, then your crowdfunding campaign may find few takers!
Draw inspiration from the successful crowdfunding campaigns. Try to decipher what they did right, how they planned their campaign and timed it right. For instance, the Coolest Cooler crowdfunding project was launched on Kickstarter platform in 2014. It managed to raise $13 million, way beyond their expectation! Why? Because they timed it right, i.e. the summer season.
As Kickstarter quite rightly pointed out that the owner Ryan Grepper sensibly planned his campaign at a time of the year “when people in the US were most likely to have frozen margaritas on their minds.”
Before you decide to apply these tips for successful crowdfunding campaign, make sure you have done own market research. There’s no point proceeding with a fund-raising project if you are not ready with a full-proof plan. A half-hearted effort can put an end to your entrepreneurial dream which you surely don’t want!
Find the article useful? Want to add something more? Drop me a line with your view about crowdfunding and we may add it in the next article.