It is no secret that in recent years crowdfunding has become hugely popular, evolving from a small personal fundraising platform to a comprehensive validation tool for startups, corporations, and nonprofits.
In 2016, equity raised from crowdfunding passed venture capital funding for the first time, and the World Bank Report estimates that global investment through crowdfunding will reach $93 billion by 2025. No wonder established business owners and fledgling entrepreneurs alike are gravitating to crowdfunding as an attractive alternative to traditional funding.
If you are thinking of starting a crowdfunding campaign for your business, you’ll need to take steps to ensure you have all the important elements in place before approaching investors — or launching a campaign.
We asked a few entrepreneurs who have launched successful crowdfunding campaigns to provide their best tips for success:
Success is Ninety Percent Preparation
- Get to work early
“The real work of a campaign starts way before you go live with your campaign. You should start securing funds 3 months before your campaign officially begins online. Email friends, family, and colleagues, work the phone, and collect emails from a landing page so that when your campaign goes live, you can hit your goal within days.”
– Sunny Williams, Co-Founder and CEO, Tiny Docs
- Incentivize the early birds
“The sooner your campaign can get traction, the easier it’ll be to get more backers and press. Incentivize early adopters with discounts, bonuses, or faster delivery to make sure you get your campaign moving in the first 72 hours as fast as possible.”
– Derek Miller, Director of Product and Development, Cyanide & Happiness
- Set the right expectations in advance
“Entrepreneurs need to be totally honest with themselves upfront as to who is going to donate to their campaign. 95% of donations will come from immediate friends and immediate family. I prepped my friends and family well in advance of going live with my campaign, through regular blog posts and Facebook status updates to get them excited and ready to support as soon as I went live — and it worked! I raised 40% of my goal through pre-sale of product and straight donations within the first 48 hours of the campaign.”
– Jennifer Coulombe, Founder and CEO, Sat Nam babe
- Listen to your customers
“Their advice is what will make your business a success. Good communication builds trust and will likely result in them promoting your project within their social circles.”
– Adam Stager, Co-Founder Infinity Top LLC, Founder TRIC Robotics
- Practice patience and persistence
“A crowdfunding campaign is like hosting a giant party. You can’t send out invitations the day of and expect everyone to show up at your door excited and ready to get down. You’ve got to send out invitations, promote the party, make sure you’ve got everything your guests could want, and so on. There’s no room for guessing, you need to know who is going to show up to your party, when, and why, in order to throw an unforgettable party.
How do you know when you’re ready? Use the 40–72 Rule: if you have enough people on your email list to raise 40% of your goal within 72 hours, your campaign will fund.”
– Derek Miller, Director of Product and Development, Cyanide & Happiness
You Can’t Reach 100% Without the Insanely Important Last Ten Percent Perspiration
- Make this campaign your full-time job
“Once the campaign goes live, allocate 30–40 hours per week to work on the campaign. It is WORK! You have to respond to questions, continue to send out emails to potential supporters, seek out PR opportunities, market and work the phone. It is a 30 day sprint.”
– Sunny Williams, Co-Founder and CEO, Tiny Docs
- Start your marketing by building relationships
“Don’t expect to raise everything via social media and online marketing. Pick up the phone and make calls within your network. Build relationships, if possible, before you launch your campaign.”
– Sabya Clarke, VR Director, Writer, Producer, Cinemagick
- Strap in: It’s going to be a bumpy ride
“I was not ready for the pure emotional rollercoaster or the middle part of the campaign when donations and excitement slow down. Then you wonder why some of your closest friends aren’t supporting you and donating. An entrepreneur MUST have that fire within them to persevere and strive toward meeting/exceeding their crowdfunding goal, as no one else but you will fight for your own company.”
– Jennifer Coulombe, Founder and CEO, Sat Nam babe
Never Forget Where You Came From
- Say thank you
“Whether your campaign is successful or not, make sure that you thank your supporters and let them know how grateful you are for their support.”
– Sunny Williams, Co-Founder and CEO, Tiny Docs
While there’s no way of guaranteeing crowdfunding success, by studying projects similar to your own, and by learning crowdfunding strategies and tips that have worked for others, you can certainly maximize your chances. Like any other business venture, crowdfunding is an iterative process that starts long before the doors are opened, and long after the campaign has closed.
Prepped and ready to start your crowdfunding campaign? Join Moonlighting and tell your Moon$hot Story today.
Originally posted on blog.moonlighting.com