When you are launching a crowdfunding campaign, you have to create a following, attract supporters – and you need to start working on that before the campaign is live. Richard Swart, director of research at the Program for Innovation in Entrepreneurial and Social Finance at the University of California, Berkeley, found that campaigns that successfully raised $100,000 spent at least 200 hours preparing for a crowdfunding effort and an average of 136 hours managing it – all before pledged funds hit the bank. “To reach the funding target, the first 30 percent of funds needs to be committed before the campaign goes live,” Swart says.
Start with writing down who your ideal customer is and who your ideal funder will be. Focus on real data about customer demographics and online behaviour, along with educated guesses about their personal histories, motivations, and potential concerns.
Try to answer the following questions while you write out your personas:
- What are the biggest problems they are trying to solve?
- What do they need most?
- What information are they typically searching for?
- What trends are influencing their business or personal success?
Next, develop a profile of each persona’s typical online activities – think about all the ways they research a potential purchase on your site or on others.
- What do they do online? Do they read blogs? Are they active on social media?
- What kind of search terms do they use? Are they on email lists or RSS subscribers?
- What kind of information do they tend to consume online? Infographics? Videos? Podcasts?
Start a blog – people to trust you enough to hand over their money. Create a custom website for your blog and (guide on how to create a blog).
Create a landing page – you need a page on your new website that will encourage people to sign up to join your email list. You can offer something related to your product/service for free in order to encourage people to sign up to your list.
Join the online communities of your target audience – sign up to sites such as Facebook, Twitter, Pinterest and Google+. Find out who the key influencers in your niche are by using tools such as Followerwonk to bring more traffic to your blog. Look into joining a couple of niche related forums and community sites.
Build an outreach list – keeping in mind the online behaviour of your potential customer base, begin to research blogs, newspapers and other websites that will be able to send a large volume of traffic to your own web properties.
Let your audience know – email your list, tweet your followers, announce it on your forums and blog. Let everyone know when your campaign is live. Send out your press release – to everyone in the media and press list you created before.
Provide regular updates – to keep your audience informed of what is going on. Let people know how much money you have raised every couple of days, highlight any positive press you have received as this may encourage people to share it with their networks.
Your campaign should tell a story and share your passion for the solution you are working on – and people will naturally want to add their support. 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 (how to pitch your startup and tell a great story). Here are some tools to help with the “crowd-building”.
In equity crowdfunding, you need to focus on what terms you’re going to offer your investors. While there is not “one size fits all” rule in raising investment, there are some guidelines to follow. This free Term Sheet resource on Forbes is a great place to learn what your options are and what might work best for your type of business. For equity crowdfunding, you might also want to consider having important and notable stakeholders or celebrities endorsing the company online. This includes the entire team, advisors, board members, partners, and existing investors.