How to Create Crowdfunding Campaigns: First Steps
“How to Create Crowdfunding Campaigns: First Steps” by Sally Yazji, Partnerships at FasterCapital
The need for keeping up with all the changes, trying to fit into the new constantly-transforming world has become an essential part of surviving and finding new opportunities with the expansion of technology in our daily life. The entrepreneurial world is no different. The rising and huge numbers of startups that seek opportunities to raise capital, grow and expand have maximised the need for making the most out of the available tools and technology-enabled solutions —such as crowdfunding campaigns— for entrepreneurs.
Startups and small businesses are not ceasing to be born. Innovative ideas are constantly put forward by the great and brave thinkers and doers of the world. According to Embroker, there are more than 12,000 FinTech startups (a portmanteau of the terms “finance” and “technology”) worldwide. This only covers one industry out of over 100 other industries.
How could all these startups and new businesses raise the money they need and get going? Can they all turn to angel investors to raise the money?
Some websites and platforms have made use of technology and AI algorithms to make it easier for both parties; startups and funding sources to get matched easily and effectively. Most of these websites fall under the category of Crowdfunding platforms.
Crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture. Crowdfunding makes use of the easy accessibility of vast networks of people through Social Media and crowdfunding websites to bring investors and entrepreneurs together, according to Investopedia.
If you are building a startup and you are looking for the right angel investors to fund your business, creating a successful crowdfunding campaign is a significant step that you have to take into consideration for achieving this goal.
Many entrepreneurs are facing difficulties creating and launching a crowdfunding campaign due to their lack of experience in this field. To avoid falling into this trap, here are ways that can help you build a successful crowdfunding campaign.
1. Have a Clear Vision and Present It Properly
Before embarking on your crowdfunding campaign, make sure that you have a clear vision of what you want to show to your potential investors aside from the innovative idea and the strong product.
You need to ensure you are presenting your project in the best way possible. Not only the content of your campaign (text, documents, images) matter, but also the way it is presented and the subtle details related to the design, colour scheme, fonts, and other form-related aspects. Never underestimate the power of looks when it comes to creating an attractive and successful crowdfunding campaign.
2. Choose the Right Crowdfunding Platform
You can go ahead and select your crowdfunding platform(s) after setting a clear vision of your campaign by deciding what your product’s profile is going to include and look like.
The internet is packed with crowdfunding platforms, but choosing the right one might not be that easy.
Make sure that you are picking a crowdfunding platform/website that focuses —or at least includes— the industry your business belongs to.
Remember that investors who will come across your startup might be using the same platform, so you can choose it according to what your preferences are regarding the funding source and the information you would like to know about that source before getting their investment.
If joining the platform and presenting your startups is paid, then it goes without saying that you should make sure the price matches your budget.
3. Set Your Product’s Brand and Logo
A catchy and unique brand name and logo are highly important to catch your investors’ attention. Think about using bright colours for your logo and all of the images in your crowdfunding campaign. Also, pick a catchy and smart name that will spark your visitor’s curiosity.
Most of the time, the visitor will be scrolling through a list of logos and brand names. To make him pause and read more about your campaign, you need to come up with innovative and well-executed ideas.
4. Set Your Funding Goal
According to Themeum, your funding goal is the minimum amount you need to start on a project and pay for rewards if you have offered any.
Make sure to set a fixed funding goal because once you launch your project, you cannot change it.
Consider including all the materials, resources, expenses, fees, and taxes in your funding goal so as not to be short on the money once these extra costs pop up.
Your funding goal should be fair and reasonable. Do not aim for too much money to be raised. Having a clear vision and specific goals in mind will help you in successfully estimating how much money you need to raise.
5. Accept Feedback and Thank-you Email
Since you are aiming at creating a successful crowdfunding campaign and getting into a crowdfunding platform, then expanding your startup and raising capital for scaling, growth, or other development-related purposes is your ultimate goal. Therefore, accepting constructive feedback you receive through the visitors and/or investors is important to keep your startup progressing and probably, in reaching your goal of raising the money needed.
Do not forget to send a thank-you email to your donors immediately and inform them of updates and new plans, proposing how they can further help you.
6. Personalize Your Message
You need your campaign to stand up and be unique from other campaigns due to the crowded nature of these crowdfunding platforms.
The amount of funding you receive from investors and your donors will depend on your message. The more personal your message is, the more it will attract your visitors. Make them feel like they know you and relate to your story, give the impression that you are trustworthy, and leave a much more lasting effect than cold calling copy-paste messages.
7. Offer Gifts or Extra Features
One way to make your supporters make donations and investments are offering gifts or premium features according to the amount they are investing, or maybe some other metric you can choose. This will encourage the supporters to offer more help and feel that you are trustworthy.
Even if it is not that huge, it is always appealing to receive a special offer or a gift.
Final Thoughts
It goes without saying that crowdfunding campaigns are an excellent way to expand, grow, and raise money for your startup. It is a great way to present your startup to the public eye and investors without really having to waste extra time on approaching angel investors one by one. Crowdfunding campaigns make it possible for you to present your project to a whole community online, and you can only make that work by creating a strong and attractive crowdfunding campaign.
