You have heard stories of amazing crowdfunding campaigns that fill in less than two hours, and continue to raise millions of dollars to jump-start some specific idea. For every story like this, there are thousands of other campaigns that only make a few dollars (or nothing at all!). What is the difference – the “special sauce” that makes a certain few campaigns’ fund-o-meter fill up like magic? Are the ideas that much better, or that much more revolutionary than yours are? Not necessarily.
A Better Business Plan
Some of the simplest-seeming plans are the ones that require weeks – if not months – of laborious research, planning, writing, convincing . . . all of the things that a “normal” business plan requires. You have to get your stakeholders on board by creating a rock-solid mock-up of your project; although these days it does not matter if your mock is physical or digital – and digital may even be preferred. Do not stop there; take the time to consider the premiums or incentives you can offer to the crowd once you get to the equity stage. Whether you are a currently active business that is seeking to expand or a brand-new startup, there are always ways to give back to the crowd. Take the time to check out some of the most recent and successful campaigns and judge their offerings – there are generally several different tiers of premiums that crowdfunders receive for their investment.
Pick a Platform
The number of crowdfunding platforms has grown to epic proportions in recent years, and a site called CrowdsUnite seeks to cut through the clamor by allowing crowdfunding users to rate the various sites. Kickstarter or RocketHub are two of the most well known sites for crowdfunding and are donation-based. However, if what you are looking for is a true equity investment site then check out EarlyShares, or Prosper for debt-investment. Decide whether you want to be able to keep all of the money that you make, even if your project does not fully fund or if you are willing to take the risk of losing out if your project does not make the grade. The platform you choose needs to be popular enough to give you the range of interested individuals while still allowing you to be unique in your space or you risk getting stuck in the back of a crowded elevator.
There is a good deal of truth to the saying that you need to be able to convince those closest to you to invest or you won’t be able to convince anyone else. Your passion and heart for the project need to shine through each step of the process – and that can be one of the scariest and most uncomfortable parts for some people. Reach out to your personal network of friends, family, business partners, and associates from school – and use these trusted individuals to help you repeatedly tweak and hone your pitch. Taking the time to get your network invested not only in the idea but also in you will give you the confidence you need to reach outside the friend zone and into the scary world of the crowd, where you cannot always predict what type of message will resonate. Having feedback from smart and savvy business people who can help you pick apart your business plan upfront means you’re offering that much better of a product to the public when you eventually get there.
Choosing your crowdfunding platform was only the first of your online activities – now comes what is arguably the most important communication tool in your arsenal: social media. Before you build your Kickstarter page and start posting to your business Facebook page and sending emails to all of your contacts, you need to do the very important pre-work of building interest in your idea. As soon as you start building your business plan and decide you really are moving forward with this idea, start to tease it to your audience. This is the time to build your social media presence if you do not already have one – but be strategic in your movements. There are many different social media outlets and you have to find the one or several that provide the most engagement from your audience with your specific idea. If you have a technology project, Pinterest is unlikely to be your best bet, but Twitter and YouTube will likely provide you with great engagement rates.
It makes sense to test the waters before you launch a full-on content marketing campaign to assure that your messages are engaging and that you have the right marketing mix of platforms to reach the broadest possible group about your message. Spend time creating thoughtful content that will value your user base – this is not the time to push out a bunch of promotional messages. Keep the value to your reader top of mind, and your audience will respond.
You have your intro video, your snazzy graphics, and your content marketing plan firmly in place. You know your business story and you are sticking to it. You know exactly which platforms will provide you with the size of niche audience that you need to get fully funded. All that is left to do is to take a deep breath and hit the ‘Publish’ button on your equity crowdfunding campaign and sit back to rake in the profits, right? Wrong. Your work is just beginning.
Smart marketers know that simply releasing something into the world is not enough to make it catch on. You need buzz, community interest . . . and some press would not hurt either. If possible, find a way to be interviewed – either for your newspaper, favorite blog focused on the topic, or a local radio or television station. Even if a television spot airs at 2am, it gives you some credibility as well as video or audio that you can use in marketing. Get endorsements and share them regularly. Continually put out high quality and interesting content that your audience can use by following the 80/20 rule: for every ten messages, only two should be promotional. The remainder should provide true value to your audience or they will disengage. Stay visible and personal in your campaign – posting relevant updates to your campaign page and to social media. Let people know that you are still visible and engaged and that you personally appreciate their support. People do not engage with brands, especially brands that they are unfamiliar with. Instead, they want to work with people – people just like you – people with a story to tell and a compelling way of communicating that story.
Even when you do not have huge premiums available, saying ‘Thank You’ is often enough for your supporters. Everyone likes to be appreciated, and being able to share on a regular basis how their funds are advancing the business is important on both sides. If you leave with no other thought, remember “consistency”: consistency of communication timing, consistency of messaging, and consistently saying ‘Thanks’.