It is now potentially easier than ever to raise startup capital and get a great business off the ground. Crowdfunding has been made accessible to every entrepreneur via the internet and this is good news for anyone that has an amazing idea but lacks the resources to actually turn it into a business. It might even be a more realistic option these days than asking for a bank loan. Here are our Top 5 Tips for crowdfunding:
1. Tell your story. If you have struggled to raise funding for this project from all of the traditional sources like banks and angel investors, make sure you relay this information to potential contributors. Your backstory is often the thing that will convince someone to back a project, as the majority of crowdfunding is emotional and not on any expected return on investment.
2. Keep it as simple as possible or things are likely to fail. Already we are starting to hear stories of the projects that haven’t made it through to completion despite being fully backed. This is usually as a result of over ambitiousness and poor planning rather than anything malicious, but it still means backers will lose their money and be extremely angry.
3. Don’t be afraid to be extremely niche. Your project doesn’t have to appeal to everyone – if it fulfills the specialist needs of a niche group then these people are likely to be delighted and will back your project in a big way.
4. You can inspire people to give more to the project by providing the right incentive. Reward high backers with special editions of the product you hope to create or take them behind the scenes of the production process – anything to make them want to give more than the standard contribution to receive the basic product.
5. Crowdfunding campaigns only last for a limited amount of time so make sure you really make the best use of that time. Promote it heavily on social media and look for media exposure wherever possible, whether it is in print or on television or radio. If you have a unique product that needs funding then you are guaranteed interest.