Crowdfunding is exploding as a way for entrepreneurs to capitalize projects. With sources of funding no longer limited to traditional investors, ideas that may have gone unnoticed or unfunded a few short years ago are now being brought to market. Crowdfunding spreads risk and allows entrepreneurs to maintain exclusive control of their projects. If you have an idea that needs funding, and you’re thinking of going the crowdfunding route, keep these helpful tips in mind.
Do a temperature check on your idea
The people you can expect to support you early on are your friends and family. Before asking strangers to part with their money on your behalf, see what your core group thinks. If people who like you and have a personal stake in seeing you succeed are not enthusiastic, how can you expect anyone else to believe in you?
A poor reception at this point is not necessarily the end of your adventure, but try to find out why your plans did not generate the excitement you expected. Maybe your idea is solid, and you just need to work on the presentation, or maybe there is a central flaw that can be fixed. This is the time to find out and work on correcting the issue.
Connect with your audience
Having five supporters who give you $100 each is better than having 50 supporters who give you $1 each. Bigger is not always better. While you would be foolish to not try and get as much exposure as possible for your project, showing it to a million people will do you no good if none of them find you or your idea to be engaging. Use Twitter and Facebook to build a community around you and your idea. Answer questions and interact with your potential investors. Make your audience see how they will benefit from your idea becoming reality.
Communicate with focus and clarity
Make sure your potential investors know exactly what you are working for and exactly where their money is going. Give clear goals for your project, explain in detail why you need the amount of money you are asking for, and as much as possible, provide a timeline for your project.
Brevity is your friend when selling your idea. Provide information, but do it as concisely as possible. If you find yourself wandering off topic or having difficulty expressing your idea succinctly, ask for help. If necessary, hire a professional to put your plan into words.
Make it pretty
Looks are important. If you look at projects that were crowdfunding successes, you will see that most of them have plenty of pictures and videos to help get their ideas across. Crowdfunded gaming consoles and devices have 3D renders before a single prototype is produced, and crowdfunded video games have concept art and screenshots. If your project does not lend itself to visuals, create charts and graphs to display your data and goals. Record videos of yourself and your team talking about your ideas. Give your visitors something to see besides words.
Know your market
If your audience is software development professionals, it makes sense to use technical jargon and to explain how your product works under the hood. If you’re crowdfunding a movie, your potential supporters probably don’t care about which microphones you’re planning to use, or the details of your editing suite. Make sure your pitch is relevant to the people you are trying to attract.
Offer concrete incentives
You may think your idea is so good that people should give you money just for the privilege of seeing your product or service come to market. You may even be right. You may have something so revolutionary and so important that the world will be a better place for it. You still need to offer an incentive if you expect people to turn over their hard-earned dollars. Even if it’s only a signed copy of your book, or a framed piece of concept art, offer your investors something they can’t get by sitting back and waiting for other people to fund your idea. Everyone likes to feel appreciated, so give them what they want in return for giving you what you need.