Getting funding for a startup is seriously difficult. And if you haven’t been blessed by an angel investor and VCs aren’t taking the bait, you can end up feeling pretty lost. But don’t panic just yet. There’s another option for the investment-seeking entrepreneur: crowdfunding. Crowdfunding not only gives you the chance to raise some serious investment, it also lets you get some really helpful market validation. Do people want what you’re selling?
That said, it’s not easy. You might not have to deal with those elusive investors, but you do have to plan and execute a crowdfunding campaign. It’s going to take all the skills in your business arsenal to get it right.
Luckily, we’re here to help. In this hub piece, we’ll help you understand exactly what you need to run a successful campaign. From creating your campaign video to building a social media following, we’ll cover it all. Let’s jump in.
The Complete Guide to Crowdfunding your Startup
Which crowdfunding site should I use?
The platform you use will depend on what you’re fundraising for and how much flexibility you want. These guides will talk through your options.
Crowdfunding platforms can be pretty confusing, right? There’s lots of them, and they all offer different things. Because of this, it can be difficult to know which platform is right for your startup. But the right information can make a world of difference. In this article, we’ll talk you through 5 different crowdfunding platforms and what you can expect from them: Kickstarter, Indiegogo, Crowdcube, Crowdfunder and Crowd Supply. We’ll cover their pros and cons and how well each platform caters to startups.
As the biggest name in crowdfunding, Kickstarter’s an obvious place to turn. But don’t see it as an easy option. The startling fact is two thirds of all Kickstarter campaigns fail.
But why do they fail? I hear you ask. It’s because not everybody realises just how much work you need to put into your Kickstarter campaign to make it successful. Even if your idea is the bees knees, it’s not going to get noticed without an all-singing-all-dancing campaign. Luckily for you, we’ve put together a guide to posting a Kickstarter campaign. Read it before you do anything else.
Like Kickstarter and Indiegogo, Crowdfunder is a generalised fundraising site. You can launch any kind of campaign there. However, the design and feel of the platform is more corporate than other general crowdfunding sites. For this reason it’s perfect for startups and small business ideas.
It’s UK only, so hard luck if you’re based abroad. But, for those located in the UK and looking to raise it’s perfect. To find out how to set up your campaign, read this guide:
Niche crowdfunding sites
There are plenty of niche crowdfunding platforms out there, each with their own individual benefits. It might seem risky to fund through a platform that’s less well known, but doing so could actually help your campaign.
Did you know a survey found that the top 4 crowdfunding sites according to user reviews are all niche platforms? Kickstarter came in at a lowly 5th place.
So why are the niche crowdfunding sites so popular? Seems like they can out-perform Kickstarter, if you know which one to choose. After all, only one third of Kickstarter campaigns actually reach their funding goal. Could your campaign do better elsewhere?
Find out what Indiegogo, Seed&Spark, Crowdfunder and Crowdcube can do for you:
What do I need to run a successful crowdfunding campaign?
To get the most out of your campaign, you’re going to have to make your campaign page look as polished and exciting is possible. It’s got to be all-singing and all-dancing, complete with some professional graphics and a fantastic explainer video.
The Complete Crowdfunding Checklist
If you’re looking for a breakdown of everything you’ll need in one easy to find location, check out our crowdfunding checklist. You’ll find a summary of all the steps you’ll need to complete when setting up a campaign for your startup.
Kickstarter videos have taken on a life of their own, and it’s easy to see why. Campaigns with a video on Kickstarter have a 50% higher success rate than those without. So it’s important to get yours right. Our top tips will tell you how to tell your story in the most compelling way, how much you should budget and how you can get one made.
On top of your video, it’s a good idea to break up your campaign text with some custom graphics, illustrations and product photography. Graphics and visual assets are essential for a strong crowdfunding campaign – if you use them right, they’ll help convince more people to fund your campaign. Read our article on what you’ll need to make your campaign page, email marketing and social media stand out from the crowd.
All the effort you’ve spent building your campaign page will be for nought if you don’t publicise it. You need to use all the channels at your disposal to get the backers you need to hit your target. A word of warning: you’re going to be sending a lot of emails. But use these guides to plan your outreach strategy so it’s as simple as possible.
Leveraging your network
The first port of call is your personal network. Get friends and family (and colleagues, and that one guy who works in the corner store) onboard and you’ve got one of your easiest sources of funding locked down. Ultimately, it’s going to be easier to persuade your mum to fund your business idea than it is a random stranger who has stumbled across your page. Find out the best way to leverage your network:
We’re often guilty of choosing social media over email, because we assume it will have impact and we can reach more people. However, research has shown that on the whole email is more effective. The stats say it all: for every $1 you spend on email marketing, you can expect a return of $38. Plus, it’s been estimated that by 2020, email will be used by 3 billion people, and of those that aren’t using it, 1.6 billion don’t have access to electricity. This means email is the most effective way to reach customers in the developed world. We’ll help you get started using email to maximise your crowdfunding efforts:
Social Media Outreach
Even before your campaign goes live, you’re going to want to hit the social media hard. You’ve got to choose which networks to target, build up a following and try to create a bit of buzz in the cybersphere…All before you even think about pushing that launch button. And naturally it doesn’t stop there. Between campaign updates and pleas for donations, you’re probably never going to want to look at Twitter again. So make it easier for yourself by reading our guide on setting up your social media campaigns.
8 Best Crowdfunding Campaigns of All Time
Whether it’s writer’s block or you’re just feeling a bit burnt out, putting together a crowdfunding campaign is exhausting and filled with what if’s. So take a break from the toil and get inspired by looking at what can be achieved if you run your campaign the right way. Whether it’s quirky card game Exploding Kittens or revolutionary roads from Solar Roadways, these companies are killing it. Without further ado, take a look at our favourite campaigns of all time.
What is equity crowdfunding?
Equity crowdfunding is a type of crowdfunding that’s a bit different from rewards-based campaigns like those on Kickstarter or Indiegogo. Instead of backers getting rewards, people agree to buy shares to have a stake in your company. If you’re more interested in traditional investment methods, this gives you the best of both worlds. Not only can you offer shares, but you can offer them to a much wider audience than if you were approaching angel investors on an individual basis. Find out more:
How long do crowdfunding campaigns take?
If you’re not thinking about how long your campaign will last, you should be. The length of your campaign can seriously impact your chance of success. Too short and it won’t gain momentum. Too long and it’ll lose momentum altogether.
Campaign length differs from platform to platform. Kickstarter lets you choose anywhere from 1 – 60 days. Indiegogo lets you set set any amount of time you like. So what’s the best timeframe to choose?
Crowdfunding Startups: Capital
Crowdfunding has helped so many startups and small businesses raise capital and secure their futures. But, for every campaign that’s a success, there are several more that have failed.
This is because crowdfunding isn’t right for every business model, and it could depend on the amount of capital you want to raise. Find out more about setting goals that will make you a success:
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