Is Crowfunding Right For Your Business? : Under30CEO Is Crowfunding Right For Your Business? : Under30CEO
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Is Crowfunding Right For Your Business?

| July 23, 2013 | 4 Comments

crowdfundingCrowdfunding has taken the startup world by storm and has given business owners another choice at raising capital for their cash stricken business. Most start-ups are suitable for websites like Kickstarter or Indiegogo but some should be cautious! Outside investment can be hard and challenging but having an unsuccessful Crowdfund campaign could not only waste time and money, but also kill your drive. Ask yourself the questions below and find out whether your startup is ready to launch a Crowdfunding campaign to help reach your funding goal.

Is your concept innovative and exciting?

Crowdfunding is all about the journey for the backer!  They watch you build your project every step of the way and each backer is willing to wait months to receive the finished reward.   If they have seen your idea done before, that excitement for them is reduced significantly.  Your goal is to educate them on your new concept and give them a reason to fund YOU.  Only then, will they take a chance with you on this new and exciting idea.  Adding features people have not seen and including extra benefits will dramatically help your campaign.

Are your rewards tangible?

People love stuff they can touch, receive, and show off to others.   Your campaign is off to a good start if your idea/concept is an actual tangible product that you will eventually have to ship.  Many campaigns fail simply because people don’t want to wait 3 to 6 months to actually see the final version or watch it slowly built on the web.

Exceptions – movies/documentaries, app games, supporting a cause

What is the reason behind what you’re doing?

Backers want to support campaigns that have a real story behind them.  They want to know the “why” you are doing this and “how” you got started.  So give them what they want and make it easily understandable in your video. Let potential backers know the struggle that went along with making this dream a reality.  They want to feel like they helped you overcome the obstacle that was stopping you from bringing your product/idea to life. Also make sure to let them know “who” you are and even “where” you are located just to help people feel a real connection with you.

Do you have social influence?

Leveraging your large personal network and knowing key influencers who are willing to promote your campaign, can dramatically increase the chances that your campaign is successful.  Friends, family, co-workers, acquaintances, as well as followers on social media platforms give you an easy outlet to share your message. Don’t be afraid to reach out individually to people in your network and ask for them to donate.  You have one chance to raise this money so be proud and don’t be shy!

Have you found the right Crowdfunding platform?

Before creating your campaign and coming up with a marketing plan, you should decide which platform you will be using.

Kickstarter receives the most exposure and has the biggest fan base but is also the hardest website to get your campaign approved on.  There is a rigorous application process and they don’t allow certain industries or ideas.  It is important to review their rules and regulations before considering using this platform.

Indiegogo allows anyone to start a campaign and attempt to raise money.  They don’t have as strong of a following as Kickstarter, but this is the top website to use if you are not approved for Kickstarter.  They also take a much smaller fee of your funding goal so take this into consideration.

Also look into other Crowdfunding websites like… Crowdfunder, Rockethub, Crowdrise, Fundable, and more.

Is your idea right for Crowdfunding?

Scroll through the Crowdfunding website you select, and see if your industry has similar projects that have been successfully funded.  This will give you good examples to research so you can get ideas for your video, rewards, or description layout.  You can even contact the creators for advice.  One thing I have realized about Crowdfunding is that project creators love to help and share their wisdom.

Are you going at it alone, or do you have a team?

Crowdfunding is already very demanding, more so if you are a full-time student or busy with work, so it might help if you have a partner or two working on this with you.  Dedicate a few hours each day to marketing your campaign throughout its duration.   The real work comes before as you plan your marketing strategy and get organized for the launch.  Another plus to having more team members is that you are able to reach out to different networks of family and friends!

Is your business ready to Crowdfund?  

Austin Glenn is the CEO and Co-Founder of Jamboo Headphones, a San Diego based company that was successfully funded on Kickstarter.  He is also the Co-Founder of Campaigner Crowdfund Consultants at letscampaign.com! Feel free to contact me with any questions you have about Crowdfunding.

Image Credit: http://fundstlouis.org

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Category: Entrepreneurship, Funding

  • Daniel DiPiazza

    I’ve used Indiegogo successfully – I like that you get to keep your money, even if you don’t meet your goal. But I realize it doesn’t have the, ahem, clout of Kickstarter.

  • Pingback: Is Crowfunding Right For Your Business? | StupStep

  • Mike Darche

    It’s also important to make sure you aren’t biting off too much to handle with your reward system. There have been a few Kickstarter campaigns that raised well beyond their pledge goals, but then struggled to produce the actual product because they were overwhelmed with smaller pledge rewards. You can get stuck working out the logistics of T-shirt orders and neglect developing your true product.

  • Melissa Krivachek

    I think having a campaign depends on what you are trying to accomplish while many people believe money is their answer to the problem the reality is it’s not. Finding creative solutions to get your business up and running is just as important finding the market, and creating a profit. Without a shadow of a doubt the #1 key to remember in any campaign for crowd funding or otherwise is you have to have an audience. Great article!