Crowdfunding has become an effective way to launch products which have gone on to dominate their markets. For example, The Pebble Smartwatch initially launched on Kickstarter. With the option of crowdfunding, entrepreneurs do not have to struggle to fund production with money from their own pockets. Instead, platforms like Kickstarter and Indiegogo allow founders to launch their products with the backing of several investors in only a few days.
What is surprising is the fact that even on Kickstarter – probably the biggest crowdfunding platform around – only 36% of 405,754 projects launched on the site were successfully funded. That’s about 199,817 projects. The numbers are much lower on other platforms.
This means that as you work on your crowdfunding campaign, nothing is guaranteed. You have to fully prepare. Aside from creating a unique, problem-solving product, you need to follow this checklist before launching that campaign:
1) Pick a platform
The first thing to do is make a choice about the platform you will use to run your crowdfunding campaign. Kickstarter, Indiegogo, Donorbox,and SeedInvest are among some of the more popular crowdfunding platforms for startups today. It is important to understand their terms and conditions, rates and what percentage they take from the raised funding.
2) Legalities and taxes
You need to read up on crowdfunding laws. It is essential to understand what laws and taxes apply to your campaign before setting out to begin raising funds. This is critical to avoid unnecessary visits from government representatives to discuss your taxes.
An even better strategy would be to consult a lawyer, who will guide you on what to rules have to be followed and how to do that.
3) Set a budget
You have to find out how much you need to run the campaign. Ideally, this should cover project costs, shipping costs, and promotional expenses.
There are free tools like this one to help you round up the figure. Once you have your required budget, you know how much needs to be raised as well as what it will take to get that done.
4) Research previous campaigns
You have to take a look at previous campaigns similar to yours. Find out why they successfully raised the funds they needed, or why they didn’t. Understanding their campaigns will help you to develop a strategy that works for you. This allows you to go into the next phase of the campaign with the strategies that you need.
5) Media List
The media is a very important part of your campaign. You need your crowdfunding campaign to be seen by as many relevant people as possible. It is not easy to do that without a plan. First, you need to use platforms like Pressfarm to build a target media list for your outreach to journalists.
The PR experts at Pressfarm are skilled at building personalized media lists which contain contacts from each client’s specific niche. In addition, Pressfarm offers all clients access to a comprehensive media database with over 75,000 journalists across industries. When used with the media lists, this database helps clients to connect with the best journalists to share their brand story. Beyond connecting clients with media contacts in their niche, the PR team at Pressfarm can also help brands create quality content to capture media attention when it’s time to send pitches out. With a professional press release, an engaging feature article and a creative media kit from Pressfarm, you can create a memorable impression for your brand. Signing up with Pressfarm could be just the thing you need to create a buzz for your Kickstarter campaign and drive more backers to the campaign page.
You will be looking to contact journalists who have written about previous crowdfunding campaigns in your niche, or on a broader range, journalists who are interested in your niche and would be willing to listen to your story.
6) Your Story
Having an interesting story about how you got inspired to build your idea, and why you are pursuing this cause is very critical especially #1) to get people moved enough to want to fund you, #2) to get attention from the press.
A moving story has one major element: it has to be an issue other people have faced. Some of the most successful crowdfunded project succeeded because of powerful storytelling. Capitalize on this and create a story that is so moving and easy to relate to that other people will be driven to support your goal.
7) Elevator Pitch
If you were to explain to a 10-year-old boy or girl in the simplest terms what your product does, how would you do it? What about a grandma or grandpa of about 80 years old? In order to engage your audience, your elevator pitch has to be concise and easy to understand.
Today, if someone can watch a short 2-minute video about your product, story, and goals, they do not have to read all your campaign copy. Video has become a very important visual. Invest in a video that showcases your story and captures the problem, shows the problem-solving process, and captures the solution in all its glory. It should be short and sweet.
9) Professional Graphics
In addition to video, you should invest in appealing graphics. Put some effort into the photos you take of the product, and your team, as well as any other illustrations. Professional graphic designers will go a long way in helping your crowdfunding campaign make a strong first impression. After all, first impressions can make the difference between someone stopping to check out your campaign page or moving along.
10) Campaign page
From beginning to end, your campaign page has to flow. You have to design your page with your target audience in mind. Your content will probably range from video, to written paragraphs, and photos. You have to plan it in such a way that it flows, and ends in a Call-To-Action for the participants. This is also known as the landing page – it needs to be great as a composition.
11) Social Media
As you build some momentum for your campaign, you need to invest sometime in doing the same on your social media pages. It is very important to invest in an active social media presence as early as possible. If you have several hundred followers or more, then you should start to post and prepare them for the upcoming funding campaign. These are your very initial fans and if you do a good job hyping them up, they will be your very first investors once you share that crowdfunding link.
Determining the timelines that need to be followed, and how long your campaign will last is important for two reasons. If you choose a very short timeline, the campaign period could end before you have raised the amount you needed. As a result, you won’t get funded and all your efforts will turn into a waste of time. Additionally, if you choose a long campaign period, your costs and promotional expenses could eat so much into your budget that you end up actually losing money at the end of it all.
Minimizing losses and perfecting your timing is key. You need to end your campaign at the right time. Determine your timelines as well as how long your campaign will last.
You need to make a decision on what type of rewards you are giving your investors in the campaign. For example, Kickstarter will have you reward at different levels of funding depending on how much someone contributed. You will send the actual product to the investors who put in the right price. Determining these rewards and money that the crowdfunders will have to part with is a crucial part of the process.
Launching a crowdfunding campaign can be as stressful as it is necessary. Even so, the tips above should make this process more manageable. If you are reading this and our advice is coming a bit too late, here is how you can relaunch your failed kickstarter campaign.