Top 3 Crowdfunding Tips to Get Funded
February 13, 2017
Crowdfunding is a collective cooperation of people who network and pool their money and resources together, usually via the Internet.
It seems like everyone is using crowdfunding to kick off their new business venture, be it a new coffee shop, or gadget. With the tough economic climate, crowdfunding has become a popular and alternative method of raising finance for a business, projects or ideas and has become popularized online by sites such as Kickstarter, Indiegogo, and GoFundMe.
Now anyone with a computer or mobile device and an internet connection can research, review and become an investor in a business with a push of a button. With the growing popularity of crowdfunding sites, it’s clear the idea of advertising to the general public through a crowdfunding platform is far more effective at drawing in investors as opposed to finding traditional investors the old fashion way.
To put it bluntly, crowdfunding empowers entrepreneurs.
It offers them the ability to raise capital without giving up equity or accumulating debt. Instead, these rewards-based crowdfunding platforms allow entrepreneurs to raise capital from the public in exchange for tangible products or other relative rewards.
It’s simply one of the best ways to cast a huge net for attracting investors to a business. However, with all the hype and popularity buzzing around the internet, many entrepreneurial hopefuls need to be aware that just because launching a crowdfunding campaign is simple doesn’t mean it’s easy. Be prepared for questions from investors now. How do you plan to spend the money? Do you have an exit strategy? What are your short- and long-term goals?
There is a big misconception on what it really takes to reach a funding goal and achieve success in crowdfunding. It’s not as simple as creating a campaign and clicking the submit button and waiting for an idea to go viral. Constant follow up is needed. The good news is you can succeed in crowdfunding, you just need to know how to prepare for it.
Here are three key tips for crowdfunding success:
1) Perfect Your Pitch – An incredible pitch is crucial for crowdfunding and can make or break landing an investor. People have to be sold on you, your idea and your vision before they will ever invest in your business.
For starters, write up your preliminary draft, include pictures and record a video explaining your vision, the offer and why you should get business funding. Let your passion shine through! Think about ways to create a buzz around your business. Find out who your potential investors are well in advance of your listing and find out what entices them to invest.
Send your pitch to family and friends so you can get feedback and make any necessary changes. Once you perfected the pitch, start locating initial backers before launching your campaign.
2) Test Your Rewards – Every successful campaign started with a dedicated following. The obvious rewards would be to provide backers with a digital copy, physical product, souvenirs, combined rewards, etc. depending on your business idea.
Start by testing your reward ideas with your personal network, make necessary adjustments and perfect your rewards package so it is unique, eye-catching and memorable.
3) Get Pre-Pledges – Pre-pledges are commitments from those people who fully support your business idea and will be there to invest on day one when you launch your campaign. Since the majority of crowdfunding sites provide a 30-90 day time frame for each campaign, it’s vital to launch with momentum.
Once you perfect the pitch, test your rewards, get pre-pledges and choose a reputable crowdfunding platform, you will need to establish a marketing strategy to reach your target audience so you can advance the momentum of your campaign once you go live.
Crowdfunding sites are a strong stepping-stone for acquiring investors for a business. While for some it can be a viable option, entrepreneurs do need to conduct their due diligence to decide if this business funding option is best for them.
Crowdfunding promotion sites like 40Billion.com have become very popular because they help spread the word without charging a commission. Crowdfunding promotion sites broadcast projects to their large networks of millions of users across online sites, including the most popular social networking sites – Twitter, LinkedIn, 40Billion, and even Facebook. Innovative services like tweet ads and promoted company listings were created for crowdfunding entrepreneurs of all types to tap into a growing, active “crowd” online without spending thousands on pay-per-click ads or traditional advertising.