21st Century Fundraising
Crowdfunding is a relatively new funding model that utilizes social networks and micro payment systems to finance a project, or new idea. These projects can range from comics to tech products, appealing to either small or large markets. Essentially, crowdfunding utilizes community as a tool for funding as well as most often online crowdfunding platforms such as Kickstarter.
The term crowdfunding was coined in 2006 for a fundraising effort by a video blogging community.
This clever funding system gathers both funding and feedback for your new idea, as each donation is fueled by genuine crowd-feedback. Inevitably, each person contributing to a crowd-funding campaign has poured their own money into their opinion.
The crowdfunding campaigns that generate the most revenue start with a good story. In order to launch successfully, your campaign must be based on a fresh/unique enough idea to entice a perfect stranger to be a part of your project’s success. Crowd members who feel a strong enough connection to your idea will in turn want invest in it, as well as contribute to the buzz about the project, enabled by the shareability of the online location of these campaigns. If your story is good, and your campaign enticing, exposure to your idea is simple, but so is competition, due to the increasing popularity of crowdfunding campaigns. So, how do you go about asking for donations from the public for your startup?
Who Does Your Crowd Comprise Of?
- Your personal network of family, friends and acquaintances, as well as social media followers.
- Your project’s target audience/ market.
Reach out personally to the first group, informing them about your idea. You want to get them enthusiastic enough that they will want to play a role in your success, so market your idea to them in a personalized fashion before its campaign.
In your larger group, post campaign launch, tap into specific communities through social media and personal contact that relate to your product –these could be businesses that could benefit from your project and would be willing to perhaps mention you to their clients. As your campaign is angled towards the potential customers that would benefit from the use of your product, also reach out to those who might have the same goals as you; those in the same industry as you.
Define Your Brand
You want your campaign’s crowd to fall onto a solid platform during their discovery of your campaign. Directing your campaign’s web traffic to a legitimate online presence is crucial, such as a website or reliable blog. This web platform is where your ideal funder and target market can both find the necessary information to play a role in the success of your project. The inclusion of a landing page and video on your project’s web platform both increase your brand’s tangibility and provide the opportunity for crowd members to interact with your brand.
Engage in Conversation Over Social Media
Once your campaign is live, use Twitter to search out accounts and hashtags that relate to your campaign. Follow those who an engagement with could benefit your campaign to put yourself out there
Grab and hold the interest of others. Post things that others want to read. No one wants a flood of solicitations that solely read, “Hi, please back my crowdfunding campaign” (http://www.entrepreneur.com/article/228543)
Provide Something in Return. Unfortunately your funders are not willing to just give money away for goodwill. Examples of forms of return for their investments include the opportunity to act as beta testers for the product after it is created, priority customers when the product first hits the market, or receiving a free product sample. Furthermore, any company funders may simply wish to be mentioned as investors on your finished product.
Using all outlets related to your campaign, update the progress of fundraising as it evolves, and remember to include and display a realistic deadline. Campaigns will fizzle out and die as potential funders lose interest if live for more than a month or two.
The Two Top Crowdfunding Websites:
One of the first crowdfunding platforms, Kickstarter’s reputation is built on its donation-based funded creative products such as OUYA Game Console which raised 8, 596, 474 (http://www.businessinsider.com/the-highest-funded-kickstarters-2013-7?op=1)
A company that approves fundraising campaigns for a broader array of ideas than Kickstarter, Indiegogo has demonstrated international growth and an early start in the industry.