11 Tips for Crowdfunding
/Extracted 05MAR2012 from http://www.socialmediaexaminer.com/11-tips-for-crowdfunding-how-to-raise-mone...
On most crowdfunding sites, people are not investing in the project or business; rather, they are funding it. They are rewarded if the project comes to fruition, but don’t end up owning any part of the business or project.
This is in part due to U.S. regulations currently under review by the SEC, so this may change in the near future. However, different sites have different rules, especially those based outside the U.S., so make sure you review the terms and conditions carefully!
#1: Choose the right crowdfunding site
Although there’s plenty of overlap in many of the crowdfunding sites out there, each caters to a specific audience.
#2: Know your target audience(s)
Focusing on a passionate niche can help, too. Many of the successful projects on crowdfunding sites target a specific, narrow audience.
#3: Plan ahead
A Kickstarter project can go by really quickly... Craig Mod, who successfully raised $24,000 on Kickstarter reiterates this idea of the reverse bell curve of patron interest in his excellent article Kickstartup – Successful Fundraising with Kickstarter.com & the (re)making of Art Space Tokyo.
#4: Passionately pitch your project.
Create a compelling name, description and an image as part of your project to help you stand out. A video is critical, too. (See #10 for more on that.)
#5: Have a plan for spending their money.
No matter how cool your idea is, most people want to know that you’ve got a plan that will get you there. Ricebowlproject suggests that you “give a detailed explanation of how exactly you’ll be using their money and keep all costs transparent. This will build trust in you and credibility in your project.”
#6: Leverage your social networks.
Chances are you’ll need to use social media, email marketing and other communication tools to drive your community to your project at a crowdfunding site.
#7: Break up bigger projects.
You might break your video into filming, editing and distribution. Rather than trying to raise enough to start a business and make payroll for two years, start by raising enough to build a prototype
#8: Create compelling rewards
Kris White offered plenty of rewards for patrons of his graphic novel The 36. Some were fairly standard, including a PDF copy of chapter 1 for pledges of $1. However, four patrons who were willing to pledge $1,000 each could get their name and likeness “immortalized” as a supporting character in the story.
#9: Treat your crowdfunding like a campaign
Pitching a project is the beginning, not the end, of your work. You need to continually drive people to your project page.
#10: Tell a great story… and ask for the sale
As Jeanie Finlay says in her post, Adventures in Crowd Funding, “when I launched the first campaign, I simply put up the trailer and we raised about 10 pence… I made a new trailer with me pitching the film… it made a world of difference. I now believe that people invest in the filmmakers as much as the project.”
#11: Promise—and give—credit where credit is due
People love to be acknowledged. Whether it’s on the liner notes, film credits or etched into the wall in your retail space. Let people know how they’ll be credited and follow through. It gives you a great story to tell and builds your base for your next crowdfunded adventure.