5 Crowdfunding Steps Proven To Raise Money on Indiegogo
January 14, 2017 Leave a comment
This post on how to raise money successfully using simple crowdfunding steps answers common questions for startup entrepreneurs and small businesses thinking about using crowdfunding to raise funding.
I have been in the crowdfunding space since 2008, after experiencing first-hand one of the biggest problems plaguing new businesses: There was a $40 billion gap in funding every year! That year, I founded one of the first crowdfunding platforms for U.S. small businesses to raise money online. Our platform facilitated more than $100 million in raises successfully over the next 4 years; and, in 2013, we expanded the platform to focus on promoting projects from all crowdfunding platforms using the power of social networks to spread the word.
So what steps should you take to raise funding for your business? How can you increase your access to funding and customers by leveraging social networks? In these 5 crowdfunding success steps, I will share with you some of the learnings I have gained from almost a decade in the space.
1: Turn Your Idea Into a Business Plan
A good business plan is the #1 most important factor in deciding whether to fund a friend’s, relative’s, or stranger’s business. The best thing you can do as an entrepreneur to increase your chance of success is to turn your idea into a concise business plan or presentation. Some services allow you to upload a document; however, be careful not to upload any confidential information or intellectual property that you don’t want publicly known.
Download this free business plan presentation template, which guides you to create your business plan presentation in just 13 simple PowerPoint slides.
2: Create a Crowdfunding Page
After you’ve written a compelling business plan, you need to make sections of it available online to your potential funders. Create a crowdfunding page that everyone you know can access easily on the Web. Your page should provide insight into your vision and plan for the business, how much funding you need and why, what you have to offer funders in return (e.g., discounts on products or services you sell), a memorable image or video, and a call-to-action button that makes it easy for funders to make payments to you online.
By now, you have probably heard of Indiegogo, one of the most popular crowdfunding platforms for entrepreneurial ideas. Several film, technology, and small business startups have raised millions of dollars each on Indiegogo.
You will have to select an appropriate category, add sections from your business plan to create your pitch, set your fundraising goal, and launch your campaign. No approval or special review is needed on Indiegogo, so you can get started right away.
3: Invite Friends and Family to Check It Out
After you’ve created your crowdfunding page on Indiegogo, email it to everyone you know. Crowdfunding platforms are not good at promoting projects and usually do not offer affordable promotion services, so the results you get will depend on the effort and attention you put in to promoting your own crowdfunding project.
Invite your friends, family, community members, neighbors, and other contacts in your own network to review your business idea, give you feedback, contribute towards your funding target, and spread the word to their friends too. Share your crowdfunding page’s link by sending a personal email to each friend and relative using your favorite email program, such as Gmail.
Chances are, you know at least 50 people that you can share your idea with and ask for feedback. The more people you share with, the better your chances of raising money. For example, imagine you need to raise $40,000, and you invite 40 friends and relatives to contribute $25 each, in exchange for something in return — such as an exclusive version of the product before it is launched to the general public. Each of those friends and relatives invites 40 more friends and relatives to contribute towards the $40,000 target. Together, 40 x 40 = 1,600 people helping to raise $40,000 for your business.
All of a sudden, the impossible seems possible.
4: Promote It to the “Crowd”
After you have sent out your invitations to all of your contacts and received their feedback and some initial funding, it is time to spread the word to the proverbial “crowd,” a large online audience of potential funders and customers that can get you to your goal… and perhaps beyond.
Sites like 40Billion.com make this easy by broadcasting and promoting your crowdfunding page to its large network of several million users across the most popular social networking sites for businesses — including Twitter, LinkedIn, 40Billion, and even Facebook. Innovative services like tweet ads and promoted company listings were created for crowdfunding entrepreneurs to tap into a growing, active network online without spending thousands on pay-per-click ads or traditional advertising.
Furthermore, when you use existing social networks to spread the word about your crowdfunding project, it may go “viral.” If a project goes viral on social networks, it attains high popularity and exposure very quickly, as influencers and celebrities share your link with their many thousands (or even millions) of followers and fans online. That’s how some projects raise millions of dollars, exceeding their fundraising goals many times over. You can do it too.
5: Keep In Touch
After you get funded, what then? Be sure to thank your funders and others who supported you financially or helped you spread the word. Then, be sure to keep the lines of communication open by sending them regular company updates to let them know that their support has has helped you fulfill your “American dream” and that you are achieving those milestones you had set in your business plan. A great benefit of social networks is that it is easier than ever to send messages and stay in touch.
Crowdfunding has democratized fundraising for millions of small businesses all over the world, and there are no signs of slowing down. When done right, crowdfunding gets you fast access to necessary funding, as well as access to your first customers, which greatly increases your likelihood of success as a small business entrepreneur. $40 billion was only the beginning!