Guest post by Ben Bateman, Director of Design and Technology at Indiegogo.
- “What are the common elements behind wildly successful crowdfunding campaigns?”
- “Which platform is the best fit for my business or project?”
- “What should I offer funders or investors?”
I cover these questions and more in the following critical crowdfunding success tips below.
If you’re raising rewards-based funding (not investment), Kickstarter and Indiegogo should be on your list, but you should also be aware that there are specialty platforms and communities as well that focus more exclusively on things like music, healthcare, or non-profits.
It’s best to pick among these rewards crowdfunding platforms based on the project types they focus on, the existing community of members already on the platform, as well as the way the platform structures their fundraising product.
What many people aren’t aware of, or are confused by, are the differing fundraising products and how they’re structured. In short, Kickstarter has a strong track record of success for creative projects, and their fundraising product has been an “all-or-none” fundraising product to date. This means that if you don’t raise 100% of your initial funding goal, you don’t keep what backers have pledged.
Indiegogo has a different product in that regardless of whether you meet your funding goal, if you choose to pay more (up to 9% of funds raised) they will let you keep any of the funds pledged to your campaign. But this has its drawbacks as well, as often times projects need some minimum funding to work, and sometimes the required goal is a good incentive that motivates both crowdfunding campaign owners and those funding the campaign.
If you’re raising investment for your startup or business, via what is called equity crowdfunding (where people actually can become shareholders for a potential future return), then check out Crowdfunder or Circle Up.
Circle Up takes a percentage of your funds raised, which according to their site is similar to how Investment Bankers work. Investment Bankers take fees as high as 7-10% of the money you raise. On the other hand, Crowdfunder.com has a simple flat monthly fee of just a few hundred dollars.
Pitch and Story
It’s important to remember the context of crowdfunding and fundraising online. You’re vying for a persons attention while they’re online, and they have tons of other distractions and things pulling their attention away from you.
It’s for this reason that your initial pitch and messaging absolutely must grab your funder or investors attention right away and pull them in.
Once you have their attention, the way to keep their attention and truly engage them is to engage “the two brains” as I call it. This means engaging both the Rational Brain (the “what” of what you’re doing) and the Emotional Brain (the “why” of what you’re doing).
The most effective way to do this is via telling a great story – either about yourself, the story of your project or company, or the story of your customer or who your project truly has an impact on.
If you’re crowdfunding a business and raising investment, here’s a good resource on how to pitch your startup and tell a great story, and package it all in a succinct pitch deck.
If you’re creating a rewards crowdfunding pitch, you should know that videos often double success rates for rewards campaigns. You should also be sure to have a clear and compelling “ask” of your funders that relates to your larger story and project.
Focus On What’s In It For Them
It may sound counterintuitive, but while your goal in crowdfunding is to raise funding for yourself, the more you can focus on what is in it for your backers or investors the more likely you are to create a set of rewards or terms that helps you raise the dollars you’re looking for.
In rewards crowdfunding, make sure you develop truly compelling rewards for your backers that tie in to your story and aren’t just swag. As a rule of thumb, simply ask yourself, would I go through the trouble to buy this reward myself? Also think about what is truly and unique and compelling you could offer.