With the economic climate as tough as it is right now, financial backing and investments are harder than ever to secure for small businesses. But a great new way for businesses to raise capital is through crowdfunding and websites like KickStarter. A few of the CarolRoth.com contributor network of entrepreneurs, advisors and experts have shared some of their best tips for ensuring a successful crowdfunding project. Their tips are presented below in no particular order.
You may notice some of the same ideas listed, but I kept them separate, as something in the way one is framed may resonate differently with you.
1. Sell the Media First
If you can sell your business' idea to the media, even before it launches, you'll often find yourself overwhelmed with people who want to fund the project. The media helps give your business tons of credibility and you'll find plenty of people excited about supporting your new venture.
2. CF = GI + SN
For crowdfunding success, you need two ingredients: a really good idea and an existing social net you can tap. Take away one or the other, and your project will likely be among the 95% that get a few backers, but fail to meet your funding goals. True, in a few cases the "big idea" is enough to catch fire (e.g. TikTok or Diaspora), but the reality is that crowdfunding platforms are really just marketing platforms. Understand this and your project will have a better chance of success.
3. Plan Content and Objectives
Explore the best type of content that will work best for your campaign. Create a timeline that will layout what will happen when. Develop objectives early and include key messages to stay focused.
4. The WHY Told in Video
A short video post under 3 minutes is imperative. Be sure to focus on the WHY. 90% of decisions take place on an emotional level. Check out Simon Sinek's concept on the Golden Circle to learn more. Use statements like "I believe," and share your vision. Features and functionality (the What & the How) can be illustrated in the video, but keep them to a minimum and state the *Why* with each feature you show.
Lara Feltin of Biznik
5. Crowd Support 101
The most effective way to get a crowdsourced project off of the ground is to connect on an emotional level with the audience.
Think about the last time you gave willingly to any call for funding. Didn't you "feel" something about the cause and/or requestor?
We support those things that engage us emotionally. We spend money with people we like and we give to causes we feel good about. And, we share the story with others, a necessity for effective crowdsourcing, when we're emotionally engaged.
6. Creativity is Rewarding
Come up with cool and creative rewards to give those who fund you! For example, one cupcake company named cupcakes after donors who gave $500 or more.
Do you have a crowdfunding project tip that wasn’t included? If you do, please share it below. And as always, many thanks to everyone that contributed to this article!
And if you would like to become a part of the CarolRoth.com contributor network and find out about opportunities to contribute to future articles, sign up here: http://www.carolroth.com/carolroth-com-blog-contributor-sign-up/
Author: Carol Roth
Carol Roth is a business strategist, deal maker and author of the New York Times bestselling book, The Entrepreneur Equation
. She has helped her clients, ranging from solopreneurs to multinational corporations, raise more than $1 billion in capital, complete hundreds of millions of dollars in M&A transactions, secure high-profile licensing and partnership deals, create brand loyalty programs and more. Carol is a frequent radio, television and print media contributor on the topics of business and entrepreneurship, having appeared on Fox News, MSNBC, Fox Business, WGN TV Chicago and more. Additionally, Carol’s Unsolicited Business Advice blog at CarolRoth.com
was recently named as one of the Top 10 small business blogs online. Twitter: @CarolJSRoth