Getting capital, funding and investors for any startup is challenging, and crowdfunding is just one of many tools. However, there are certainly best practices, tricks and tips to running a successful crowdfunding campaign. Just like any ask for funding, you need to plan, choose the right target (in this case, the right platform) and present your venture in the best light possible.
If you've ever watched "Shark Tank," you know that sometimes a great idea gets passed on simply because it's not in the investor's realm of expertise. Don't let a slow crowdfunding campaign or getting turned down slow you down. Hopefully, you've already done the research and drafted the business plan so you know your invention or business is a great one. Now all you need is to follow a smart strategy to get funders on board.
Here's how to do it via crowdfunding:
1. It's not (always) a numbers game
There are a lot of crowdfunding platforms out there, but don't sign up for as many as possible in the hopes of widening your net. It's about quality, not quantity, with crowdsourcing. Look at which campaigns have been most successful on each platform, any niches they cater to, and match your venture accordingly. For example, if there's been huge support of performing arts recently but you're a doggie daycare startup, that might not be the best match.
2. Set realistic timelines
It's exceptionally rare that you'll get all the funding you need in just a few weeks--or even in a few months. Of course, this depends on how much you're looking to raise, but be realistic when setting your timelines. Most importantly, don't assume that you'll be able to raise X amount of money in X amount of time. Have backup plans. This shouldn't be your only means of raising capital.
3. Share your project
Don't depend solely on investors perusing your crowdfunding platform of choice to find you. Share what you're doing with your networks from social media to places where you blog. You're the number one marketer for your company, and crowdfunding isn't a passive pursuit--much like social media savvy crowdfunding-dependent ventures like Ride the Divide know well. It's kind of like publishing a book--when it comes down to it, signing the contract and sending over the manuscript is just the tip of the iceberg. You have plenty of promotional activities ahead of you.
4. Keep it professional
You (hopefully) wouldn't submit a proposal to an angel investor or publish a website without having a professional writer and editor take a look at it. The same should be true of your crowdfunding venture. Spend the time (and often money) necessary to make it the best it can be. This includes hiring a professional writer/editor, perhaps a graphic designer to get your logo up to speed, and maybe even a videographer if you'll be including a video with your spiel.
5. Showcase the benefits (beyond those to you)
An investor wants the best ROI possible, but many of them also have a strong philanthropic streak. Highlight the likelihood for revenue, share any positive figures you already have, and if it's a natural fit, showcase how your venture will benefit others. For example, maybe that doggie daycare of yours only serves organic foods and prioritizes exercise regimens matched to breed and owner preferences. Investors with a soft spot for animal care will get drawn in.
Crowdfunding is never simple, but you can make the most of your efforts by following some best practices. Think from an investor's perspective: What kind of company would you want to support? Feel free to get ideas and inspiration from other successful crowdfunding ventures, such as Obsidian Entertainment, but of course don't plagiarize. This is a big opportunity, so treat it as such.