Whether you’re an entrepreneur, designer, artist or publisher, crowdfunding can be an effective way to raise funds while building a community to bring a dream project to life. If a campaign is successful, it can be a means to garner insights on your audience and even attract additional sources of funding.
With the emergence of platforms like Indiegogo, Kickstarter and Seedrs in the past decade, this alternative mode of financing has gained incredible traction among startups and creatives. It’s estimated that crowdfunding platforms across the EU raised €4.2 billion in 2015, according to a report by the European Commission published in 2016.
Like with all types of financing there are risks involved – both for the project creators and investors. For project owners, it’s not reaching your financial goal (which can influence your reputation and ability to raise future funding) or not being able to deliver what you promised. For investors, it’s things like fraud or not receiving the return you expected.
Once you’ve figured out which type of crowdfunding and platform is suited for your project, it’s time to start prepping for the launch (which can span months to years). We spoke to two experts about what to do and consider before rolling out your campaign.
Tap into your existing network and community ASAP
Drumming up interest for the project within your network is crucial in the lead up to the launch of your campaign. For Johannes Lohbihler – a creative technologist who recently raised over €150,000 for dadamachines and surpassed his €20,000 goal – this part started long before he put his music gadget project online. “I put a lot of effort into networking and spent a lot of time talking to music tech blog journalists – as early as two years ago,” he told us.
There’s a common misconception about crowdfunding where people believe that if you simply post your campaign online, you’ll have a chance at raising millions in funding, said Christoph Nagel, International Manager, Europe at Kickstarter. “Those stories never really happen,” he explained, “In all the very successful campaigns we’ve seen on Kickstarter, it all started from the creator and their own community.”
Think about the impact you have on a personal level and the community that’s already behind you, suggested Nagel, because this is going to help ensure the first few days of a campaign go well.
Set a realistic funding goal
Different crowdfunding platforms have different funding models. Sometimes you don’t get a dime of funding if you don’t reach your goal, sometimes you do regardless of the end result. Educate yourself on the funding model of your chosen platform before setting a goal.
While there’s no general rule because the number can vary depending on the nature of the project, the main thing is to be realistic, said Nagel. “Be transparent about how you did your math with regards to the funding goal and explain why you need that amount so people can relate,” he added.
Tell your story in a compelling way – through text, video and images
When potential backers arrive on your project page, they’ll want to know (at the very least) what your project is, why you started it, how it’s different, who you are and why they should support you. All of these key pieces of information should be present when telling your story in an engaging way.
In addition to words, quality videos and images are great means to capture attention, explain a product/idea and give viewers an inside look into what you’re doing. Nagel said an impactful video is typically between 3-5 minutes and explains why you want to do this, what the aim of the campaign is and what the funding will be used for.
“Presenting the people behind the project is is also very important,” he added, “Not only are backers investing in a project, they’re also investing in people and a story.”
Promote your campaign strategically
When thinking about the promotion of your crowdfunding campaign, it’s about creating a strategy that makes it as easy as possible for potential backers to end up on your project page to contribute. This means posting on social media channels like Facebook and Twitter are more effective because the campaign is one-click away compared to posting on Instagram or handing out flyers in person, advised Nagel.
Additionally, press coverage can also play big role on getting the word out to larger audiences and the success of your campaign. Dadamachines was picked up by over 20 media outlets and Lohbihler said that putting together a press kit before the launch was well worth it. In addition to enlisting his friends at Senic (who have also run a couple of successful crowdfunding campaigns) to help write a press package, he also did a lot of research and pitching himself before the campaign went live. “I made a list of bloggers and journalists writing about these kinds of music projects, found their Twitter accounts and drafted emails to each one personally,” said Lohbihler.
Ask your peers for feedback throughout the whole process
Looking back on his experience with the dadamachines crowdfunding campaign, Lohbihler said one of the biggest lessons he learned was how crucial it was to involve others for feedback throughout the whole process. In preparation for the launch he consulted with friends and acquaintances on everything from the funding goal to writing press kits.
“It’s really important to get other people’s opinions on what you’re doing because you can become so consumed with a project that it becomes difficult to see what’s important and what’s not,” he explained.