For small and start-up companies, crowdfunding can be a very useful tool for raising funds. You too can raise money for your business using an online crowdfunding platform. Read our tips on how to run a successful crowdfunding campaign.
Would you like to try crowdfunding for your business? In one of our previous articles, we discussed this phenomenon and introduced you to what crowdfunding is, its advantages and disadvantages, and the main platforms that can be used. In the following article, you will find advice and tips on how to ensure that you meet your funding goals through a crowdfunding campaign, if you decide to use crowdfunding for financing.
Why crowdfunding?
Crowdfunding is an alternative method of financing that businesses can use to raise money for their business plans, whether they involve a new product or service. You have probably seen stories about extremely successful campaigns that raised hundreds of thousands of dollars above their original funding goals through crowdfunding.
However, the opposite scenario is more common – projects that do not raise enough money. According to statistics, only about one-fifth of crowdfunding projects meet their goals.
How can you ensure that your crowdfunding campaign is successful? There are several steps you can take to increase your campaign’s chances of success.
Ways to get the most out of crowdfunding
Set a clear financial goal
Setting a specific goal for the amount of money you need to raise is one way to gain supporters. However, make sure the goal is realistic. People will be more willing to fund your project if they see the target amount you want to achieve.
Seek help from experts
The most important tip for a successful crowdfunding campaign is not to do it alone. Find a company or individuals who specialize in crowdfunding campaigns. They will ensure that you do everything necessary to build a strong campaign. It is also important to choose a reputable crowdfunding platform that will help you raise the necessary funds.
Be personal – tell your story
People want to know who they are giving their money to and why. Your project must interest and engage them. Be personal, authentic, and sincere. You don’t have to go overboard and reveal your private life, but you should always be transparent about your company and clearly define your needs.
Above all, you should explain who you are, what your company is about, and why it is important for you to raise funds. When creating a campaign, it is important to be as detailed as possible. People want to help, but they may hesitate if your story is unclear.
Tip: Be honest and transparent!
Create a promotional video for your campaign
Videos work much better than written text, photos, or images when it comes to interacting with your audience. A good video with sound and narration will help attract investors and become an effective marketing tool for your campaign.
However, before you publish your video, get feedback from colleagues, family, or friends to make sure it doesn’t have any dull moments or inappropriate parts.
Use your email address book to promote your campaign
Send your customers an email about your campaign and include everything they need to know to participate in the crowdfunding. Sending an email to your contact list with a link to your campaign is a direct and effective way to get loyal customers to participate in funding your project.
Use your social network
If you are using crowdfunding, you should use every contact to spread the word. Ask your client base, family, friends, and local community to share your campaign on their own social networks. This will help build awareness of the campaign, your company, and your brand.
Even if the people who come into contact with your campaign don’t contribute directly, they can share information about the campaign with their friends, which can be just as valuable. This will expose your campaign to a wider base of potential investors.
Use social media, especially LinkedIn, to reach other business owners
Instagram, Facebook, and Twitter are usually considered the three major social media platforms for business marketing. However, if you are running an investment crowdfunding campaign, it is important to also promote your campaign on LinkedIn, as it is a great space to connect with a group of entrepreneurs and business owners like yourself.
The audience on LinkedIn is likely to be more familiar with your business challenges and will also better understand the amount you are requesting to cover business expenses, which can lead to increased support.
Tip: Sharing your campaign on social channels is generally essential for building visibility and awareness.
Small business owners using this tactic should make it as easy as possible for potential investors to participate in the financing. One of the best ways to do this is to link your crowdfunding campaign to posts on social media. Then, all your audience has to do is click on the link and they will be redirected to your campaign page where they can contribute.
Introduce your audience to the crowdfunding site you are using
A confusing online crowdfunding platform with a complex user interface is something that can very easily and quickly discourage a potential investor. When communicating about your fundraiser with potential supporters, you don’t need to provide a detailed breakdown of how to use online platforms such as GoFundMe or Kickstarter, but you should include details about the platform you are using as part of your campaign promotion.
Mention its security and how supporters should use the platform. This information will help investors feel safe and comfortable using the platform.
Offer tiered incentives
Give your investors and supporters rewards based on the size of their donations, and make sure the rewards are worth it. An attractive incentive will encourage more people to support your campaign. This could be a product raffle or discounted membership to your service, for example.
Keep your audience informed
You want participants and potential supporters to engage with your fundraising campaign, so it’s important to keep them regularly informed of your progress. Sharing your growth on a monthly or even biweekly basis, depending on the length of your campaign, will help keep your fundraiser top of mind for your investors and attract additional supporters.
To sum up
Make sure that the story behind your crowdfunding initiative and your fundraising goal are clearly defined for your audience. Your audience needs to understand why they should invest and how you intend to use their funds.
Communication is essential for a crowdfunding campaign. Start by sending an email to loyal customers who may be willing to contribute, and regularly update your audience on your progress in raising funds.
If you want to use a crowdfunding platform for your business, share your story and fundraising goal with your audience. Use email, your network, and social media to reach out to potential supporters and offer incentives based on donation amounts. Keep supporters informed of your progress regularly so they feel like part of your fundraising journey.
