Are you interested in forming a crowdfunding strategy so that you can get access to more resources and grow your business? Crowdsourcing is a viable method of accessing more funds that can help catapult your business to new heights. However, you need to understand the basics to ensure that you can enjoy success with the method.
$17.2 billion is generated in the United States every year from crowdfunding. Do you want to get a slice of this large pie? Then you need to formulate a plan for positioning your bid to increase your chances of success. It can be the difference between your business becoming a success or failure.
Think About Your Target Audience
When making the pitch for your crowdfunding bid, you need to consider who your target audience will be. It’s similar to how you launch a marketing campaign for your products and business. You cannot speak to everyone in your marketing material and the same is true of the crowdfunding bid.
You might be targeting potential buyers of your products or investors who care about the message your brand stands behind. There is typically a big overlap for both of these audiences, which makes your job easier.
For all aspects of your crowdfunding material, you need to speak directly to your audience. This increases the odds that the message resonates with them, and your chances of getting funding increases.
Choose a Platform
You’ll need to select from one of the crowdfunding platforms out there. Many of the best platforms have similar functionality, but the smaller differences have a big impact on the optimal strategy. Here is a list of the top platforms you should consider:
- Indiegogo: this platform is a great choice for solo entrepreneurs and larger businesses alike. Also, it offers worldwide investments, which means it’s not limited to any single country. It’s perfect for multinational companies that are interested in securing investments from buyers abroad.
- SeedInvest Technology: with over 700,000 investors, this is a great platform for seeking investment. Also, the platform helps raise awareness among angel investors and venture capital firms. Therefore, you can access even more funding sources to grow your business. Another benefit is that there is no need to pay fees if your crowdsourcing project did not end successfully.
- Mightycause: you have a lot of flexibility in creating the digital fundraising event that matches your expectations. For example, you can set a time limit, or let the event run for up to a year. Also, if you’ve used CRM software, you’ll find that the user interface here is comparable.
- Start Engine: with over $500 million raised, Start Engine is a worthwhile platform to seek funding. The platform focuses on early-stage startups, which means that it’s the best option when getting started.
- GoFundMe: this platform is not strictly for businesses but all investment types. However, with more than $17 billion invested on the platform, you’ll find that getting investment is not difficult if you’re offering a good product.
Create An Appealing Video
You’ll find that many of the most successful crowdfunding strategies include a video that draws attention. The video should explain what your business is about and what you intend to do with the funds. This increases the likelihood that people will see your bid as legitimate and connect with the message.
Not sure how to create an appealing crowdfunding video? You should take the time to look at competitor videos to determine what’s expected. You’ll also get ideas that you can take inspiration from. However, don’t copy when looking at the other videos on the crowdsourcing platform. The community will notice and it will not go down well.
Rewards for the Backers
You can provide rewards for people that invest in your crowdfunding pledge. This increases the chances of getting bids and allows you to show thanks for believing in your business. It’s important to choose a reward that is not too expensive, yet provides value for the backer.
For instance, it could be a free ebook, discount codes, samples, and even free products. However, with free products, you need to be careful about losing too much money on the funding campaign. Consider only giving away free products to bakers that have made a large donation.
Unique Brand
Before you have a shot at securing crowdsourcing money, you need to set up a unique brand – this is what sets you apart from the competition. Furthermore, you need to highlight your brand in the messaging of your crowdsourcing page. This ensures that your message doesn’t get lost in the large number of other investment-seeking businesses.
The first step of creating a unique brand is to look at what other ones exist in your niche. Next, create a brand identity guide, which allows you to pinpoint and decide upon the different characteristics of your brand. The brand identity guide should be handed out to every employee to ensure continuity across all forms of interaction with investors and customers.
Be Specific About Goals
You’ll need to be specific throughout your attempt to secure funding so that backers take your bid seriously. This includes creating a monetary goal that’s justified. It means you’ll need to explain what you are going to do with the money. Note that some crowdsourcing platforms allow you to withdraw funds if the goal hasn’t been reached. Whereas other platforms require that the goal is met before the funds are available.
Also, you can provide different price points for backers to choose an amount to stake that is within their budget. This ensures that you get a larger number of backers. After all, every investment amount counts, so your aim should be to provide flexibility for backers.
Final Thoughts
To summarize, the ideas in this section for creating a successful crowdfunding strategy are just the tip of the iceberg. There are many more ideas that you can implement, which you will learn through the experience of launching campaigns.
Don’t give up if your first campaign is not successful. Keep trying to improve your approach, and eventually, you’ll understand how to succeed with this relatively new source of business funding.
